The self-storage business is undergoing substantial growth, and the ongoing demand is a sign that the industry is an excellent business opportunity. Buying a storage unit business for sale requires time, but a well-managed facility can produce significant profits. However, you need to know about the basic traits that separate awesome facilities from the losers.
Before diving into the critical traits a storage facility should have, we must look at the industry potential.
The Self-Storage Industry Summary
By 2020, the self-storage industry brought in a massive $39 billion in revenue.
Close to 10 percent of American households are renting a self-storage unit and spending over $80 a month on storing their belongings. Across the country, storage units realize a 92 percent occupancy rate.
So, are self-storage units a good investment?
As an investor in the industry, these commercial developments are potential money-making entities. But they can also become money pits. To help you measure whether a specific facility is a good buy, here are a few things you should be on the lookout for.
Near A Sizable Population And Enough Income To Support The Business
Successful self-storage businesses are in suitable locations that require storage units. Some critical components to look at to measure location and demand are:
• The Population Density—Storage facilities need people to be successful. The ideal facility should be at least three miles of a population over 50,000. Small-town facilities might not be successful enough to provide you with a consistent profit. Densely populated areas provide lucrative growth opportunities for your new business.
• The Community Median Household Income—Households capable of spending $100 a month and more on self-storage should be your target. Such homes have excess belongings.
• Traffic Count—Many of your customers will discover your facility as they drive by. The ideal self-storage unit should be in an area that experiences over 25,000 cars a day if you want to maximize your reach and visibility.
The Storage Unit’s Current Condition
When purchasing used properties, prepare for renovation costs to get them in good shape. While most real estate buyers have a budget for important upgrades, neglected self-storage premises may require more fixes.
An outdated security system, broken fences and doors, lack of lighting, and a poor office layout can add to the ultimate purchase price of the facility and take a huge bite from your budget. When considering a storage unit business for sale for purchase, consider its overall condition.
A property in excellent condition means you will spend less on repairs and renovations, which translates to earning a significant profit much faster.
Consider Climate-Controlled Storage Units
Some areas in the country experience hot, humid summers. The humidity and heat can damage valuable items such as keepsakes, clothing, and furniture. This means many customers are looking for climate-controlled facilities.
If you are in a humid and hot area, consider buying facilities with climate-controlled storage units. Self-storage investment opportunities at selfstorageinvesting.com with some element of climate control assure your customers that their belongings remain in top shape. Plus, many customers are more willing to pay more in monthly rent for a climate-controlled unit, so investing in a facility with this feature is a smart move.
Mobile Technology
A few years ago, all a business required was a decent website to remain competitive. Mobile technology today has drastically altered how businesses operate, and self-storage is no exception.
Your customers use their phones to find out how much are storage units, reserve and pay. Without the technologies in place, your business is likely going to lose customers to a competitor. If the facility does not have the technology, find out how much it would cost to invest in it before making a purchase.
Skills Required To Run Successful Storage Units Franchises
Fortunately, getting into the self-storage business does not mean you need a business degree, but certain advantages and skills are beneficial in the industry. These include:
• Organizational Skills—These skills will help you stay on top of the costs of running your business, rental agreements, and much more.
• Customer Service Skills—You need to engage with your customers and customer service skills will encourage them to return in the future, extend their rentals, and recommend your business to others.
• Attention To Detail—Running a successful storage unit franchise needs your attention for details such as monitoring property security and rental agreements management.
• Tech Knowledge—Experience with technology will help you implement, utilize, and troubleshoot your business’ security systems and Customer Relationship Management (CRM) software.
Research Business Insurance
Running a self-storage business requires several types of insurance, including:
• General Liability—Protects your business in case a customer is hurt while on your property
• Commercial Property—Keeps you protected in case of damage to equipment or the facility
• Workers’ Compensation—A necessity for any business with employees, which helps cover expenses such as legal fees and medical bills in case of injuries on the job
• Customer Property Legal Liability—Offers additional coverage for damage to your customer’s property during storage
• Crime Insurance—Critical coverage against damages or losses because of theft
The cost of the insurance policy depends on factors such as the size of the facility, its location, and the number of employees you intend to have. To understand how much to put aside for insurance, get quotes from several providers while investigating a self-storage business for sale. Compare the premiums, cover limits, exclusions, and deductibles as you compare the quotes.
Study The Competition
As you investigate which storage unit business for sale to purchase, examine the local competition. Find out how many storage facilities are nearby, the number of units they each have, and whether the area has the capacity for more storage facilities.
The ideal market cannot accommodate further self-storage facilities for construction. Otherwise, occupancy levels might never rise beyond a specific level.
Getting Started Storing
Purchasing a self-storage business can be harder than you think—particularly when you want to make money. Fortunately, the basic traits identified above will help you identify a good purchase. Once you know and understand these traits, you are already miles ahead of the storage unit competition!
Finding the perfect business opportunities can be hard work. Make sure you visit the Startup section of our Bootstrap Business Blog for more insights on investing in profitable businesses or becoming a franchisee.
