Why Self-Storage Is a Great Option
Growing urbanization, increased downsizing from the coronavirus, lifestyle changes, and many more reasons make the self-storage industry boom. The industry may be almost recession-resistant because it plays a vital role in many life events. Research says that by 2025, the self-storage industry will reach a valuation of $115.62 billion.
Self-storage is the process of renting out space in a building to store personal belongings. While there are many different types of self-storage facilities, all of them offer a secure place to store items when people need them out of their way.
Keep reading to discover why self-storage can be one of the best choices for business owners.
The self-storage industry has a strong track record of high returns. From 2009 to 2018, the average ROI in the self-storage business was around 16.9%. Due to such high ROIs, self-storage has become a sought-after business segment, and acquiring one can be difficult.
Lenders favor storage startups because self-storage has an excellent history of driving profits. Small Business Association (SBA) loans, especially SBA 504 and SBA 7a, have become the sought-after loans for self-storage businesses. These loans only require a down payment of 10% and help owners remain independent.
Unlike apartments or other commercial properties, self-storage units need not have sophisticated plumbing systems and stylistic appeal. The customers are simply looking for a safe place to keep their belongings. The business can also take advantage of cheaper lands, as it does not require attractive locations or uniformly shaped land.
Short Lease Periods
Self-storage units usually have short lease periods, with tenants usually on a month-on-month schedule. Short leases make it easier for the owners to raise rents on new tenants when they sign up for a unit.
Additionally, an average-size storage facility generally has nearly 500 units; even if a few tenants leave, there will be a consistent cash flow.
Scope to Expand
Along with storage, you can expand your business by providing ancillary services such as transportation services or selling add-on products like dust covers, lock kits, and much more. The more services you provide, the more customers will return to your one-stop place for storage needs.
Overall, the self-storage industry has a lot of scope for growth and expects high returns.
The New-Age Self-Storage
Adapting to new technologies and providing added value will help your storage business succeed. An effective self-storage management software to track and organize your inventory, a professional website that clearly talks about your facility, and other offers you are running are some things you can start with. It’s also vital to work on SEO for your website so that you stand ahead of your competition.
Additionally, you could plan on building tech-enabled storage units with locks that can be operated using remote access via an app, allowing belongings to be safely transported to the destination without the customer being present.
If you are considering joining the self-storage industry, it is always advisable to speak to a commercial construction company like Reliable Commercial Construction. We can help you out with your project from start to finish. Contact us for more information.