The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: Farmer123 on October 17, 2016, 10:28:17 AM
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I have heard from quite a few people that owning self storage units can be a good investment. Does anyone own these or have any insight into how this type of real estate works? I live in the Midwest where self storage units are all over the place. I also have seen a few people posting on MMM that seem to be doing well with these. Any insight would be appreciated.
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I've also heard they can be a good investment. Are you eligible for a commercial loan?
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Posting to follow.
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I am looking to build a house soon and then would be looking at investing in something like self storage units. Was hoping to gain some insight into what it takes to buy storage units and what the market is right now.
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My BIL looked into this. I don't think there is a down market for storage units, but it is not a passive investment. It is a business. You either have to run it yourself, or hire someone to do it for you. If you are OK with having a business to run, the numbers are probably there. If I were to do it, I would probably shy away from the franchises. I can't see storage units needed much advertising, just visibility from a busy-ish road so why pay royalties?
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My accountant tells me that owners of self storage units and trailer parks have been some of the most financially successful people he has seen.
They can be gold mines in the right location and properly managed.
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Couple good articles I found...
http://learnselfstorage.com/blog/2015/06/12/a-simple-overview-of-self-storage/
http://www.selfstoragesuniversity.com/articles/how-to-buy-a-self-storage-facility-properly.php
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Hey FarmerAl, have you made any headway on this? I just attended a local REI meeting and Scott Meyers was the speaker. He's one of the leading self-storage 'gurus' (though he doesn't like to be put in that category). The whole idea sounds impressive and like a great idea but then it started getting a little sales-pitchy towards the end. Outside of that though, I'm curious to hear from others who are in the business and are successful. Obviously there are ways to screw up but the idea of no tenants, toilets, plumbing, major repairs, etc is enticing along with the 'self-manage' kiosks that you can implement to reduce overhead from hiring an employee(s).
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There is a new self storage that opened up down the road from my house. It is in a great location. It's in between high income and low income. The offer RV and boat storage as well.
The issue I see down the road is people learning that having more things does not mean more happiness. Will the future generations have less stuff that they won't require a rented storage unit?
Either way, I've thought a storage unit is a great idea. All this coming from an engineer, so it's not worth much :-).
Sent from my Nexus 6P using Tapatalk
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Hey FarmerAl, have you made any headway on this? I just attended a local REI meeting and Scott Meyers was the speaker. He's one of the leading self-storage 'gurus' (though he doesn't like to be put in that category). The whole idea sounds impressive and like a great idea but then it started getting a little sales-pitchy towards the end. Outside of that though, I'm curious to hear from others who are in the business and are successful. Obviously there are ways to screw up but the idea of no tenants, toilets, plumbing, major repairs, etc is enticing along with the 'self-manage' kiosks that you can implement to reduce overhead from hiring an employee(s).
I think you might want to consider finding a better REI association. It sounds like this one exists to sell people stuff, not as an association of like minded individuals wanting to exchange information and ideas. Unfortunately, some of these groups are operated by people who make their money by promoting sales of marginal investments and it's best to stay away from them.
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I used to rent a unit from someone with an old farm property on a main road. His house fronted the road, with the storage units behind. He had some of the standard garage door units, but the rest were just prefab sheds like you'd buy at Home Depot. My stuff was in one of these for a year, with no trouble at all. The shed probably paid for itself in a year and a half.
I'm with Uturn on this. It's a business, with its own set of problems. What are people storing in there? Will they pay on time? What if they don't? Do you want to deal with that ugliness?
Indeed, marketing should be easy. Even without frontage, a good listing in Google, etc. will get you found. I've lived in 5 places in 15 years, and have yet to find a renter's market.
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Take a look at this article http://money.usnews.com/investing/articles/2016-06-20/3-things-to-know-about-investing-in-self-storage-spaces
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Hey FarmerAl, have you made any headway on this? I just attended a local REI meeting and Scott Meyers was the speaker. He's one of the leading self-storage 'gurus' (though he doesn't like to be put in that category). The whole idea sounds impressive and like a great idea but then it started getting a little sales-pitchy towards the end. Outside of that though, I'm curious to hear from others who are in the business and are successful. Obviously there are ways to screw up but the idea of no tenants, toilets, plumbing, major repairs, etc is enticing along with the 'self-manage' kiosks that you can implement to reduce overhead from hiring an employee(s).
I think you might want to consider finding a better REI association. It sounds like this one exists to sell people stuff, not as an association of like minded individuals wanting to exchange information and ideas. Unfortunately, some of these groups are operated by people who make their money by promoting sales of marginal investments and it's best to stay away from them.
Interestingly, this one was an 'anniversary' event where they had a well-known self-storage guy (Scott Meyers) come out to talk. Normally they charge cover fees to get in but it was free this time around. I haven't been to their other meetings so I don't have the most accurate feel but yea being pitched towards the end was somewhat off-putting. Maybe they felt they had the right to do that since it was a "free" meeting.
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I worked for a self storage business last year. This can be a good business. Be prepared to hire good property managers and I will say the customers in that industry can be ROUGH.
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I worked for a self storage business last year. This can be a good business. Be prepared to hire good property managers and I will say the customers in that industry can be ROUGH.
SmallCheese, could you elaborate a little? Seems like this the kind of thing that articles might gloss over.
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Sure. It's an interesting business in that it's kind of a retail/rental hybrid. People who use your business are both customers and renters. Like any business, some people will lie, cheat, and steal and then tell you they're right because they're the customer. You deal with break-ins, people breaking the rules and doing things they're not supposed to do in their units, evictions, nasty complaints, and sometimes things get really crazy and you get some scary situations on your property. But you balance that out with good staff who take care of your good customers. I think it can be a good business, but don't expect it to be an easy one, necessarily.
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Thx.