Investing in self storage units can be an excellent strategy for making money in real estate. Maybe the best of all when it comes to return on investment. The Big Decision is whether or not you should build your own facility or look for one to buy. Let’s back up a step.
Before proceeding with self storage investing, you must make sure that the market is not saturated. Yes, self storage is a great investing opportunity but it’s not foolproof. Pull out the Yellow Pages and count how many facilities are already available. Call around and find out if there is plenty of vacancy or is the market tight? You might even take a Sunday afternoon drive to visit each one. Low vacancy can be related to other issues like a terrible retail location, but it could also be that demand is soft.
Check with your city license office to find if there are any pending application for new self storage businesses. If someone has already jumped in line in front of you, that might make a difference on whether you go ahead with your own plans. Once you establish the viability of the business in your area, there are other factors to consider.
Whether you decide to buy or build a self storage facility, make sure it’s easy to get in and out of the location. Otherwise intelligent entrepreneurs sometimes get saddled with hideous retail locations and then wonder why business is bad. Access is critical to the consumer. If it’s hard to navigate, they won’t come, even if you build the self storage Taj Mahal.
There is, of course, more to analyzing a self storage facility than this, and we’ll touch on them all eventually. Stay tuned.
The MHPListings Team
Flickr / ryantron