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  1. #1
    Registered User Junior Member
    Posts
    35

    Self Storage Business

    I'm looking not for confirmation bias, but people to shoot some holes in this business plan before I proceed too far.

    I am working with a couple of friends to develop a self storage warehouse. Why? We can (hopefully) develop one at a reasonable price, and rent out the storage lockers and U-hauls at a profitable rate. Even better, we will be able to sell at a premium once we have operating history, as there are several large REITs in the space who buy at premium prices. (See Sovran Self Storage, Inc.)



    Here are the positives I see:
    • Have a builder on our team
    • Our team has committed 30% of necessary capital - we will need to finance the rest
    • Our team includes several experienced real estate operators
    • Operations are very simple to run

    And these are my perceived negatives:
    • Our builder develops residential properties. But how hard can building a warehouse shell be in comparison?
    • Due to saturation in closer in markets, we will need to find a location outside where anyone on our team has experience or local knowledge
    • Lenders may be reluctant to finance without any self storage business experience
    • A more remote location may prove harder to supervise operations
    • May be difficult to find location with existing need for more storage lockers

    Okay have it. Keep on spending time on this?

  2. Self Storage Business
  3. #2
    Registered User Semi Pro Member
    Posts
    270
    This sounds like a fantastic idea to me.

    My only thought is to make sure you go into an area that still has unmet demand. I see so many self storage places near me now. Not sure there is room for any more. But that is where I am. You already seem to know that you will need to travel a bit to find a spot with unmet demand.

  4. #3
    Registered User Junior Member
    Posts
    33
    I would love to get involved in a business like this.

  5. #4
    Registered User Enthusiast
    Posts
    59
    I think you are on the right track. And this sounds like a good idea. But remember this is a commodity product. Even if you are the first or second storage facility in town, others may follow. So the expected demand may soon be swept by supply.

    In fact, I think that has been the experience of a lot of people in the industry. And they probably only have been saved by our every growing desire to own more stuff.

  6. #5
    Registered User Junior Member
    Posts
    35
    it sounds like everyone has similar concerns to ours. there is nothing to stop further competition coming in. so even if we pick a good spot, we are still offering a commodity.

    still, the industry seems to do well regardless of economic conditions. so there must be a lot of demand, and growing.

  7. #6
    Registered User Junior Member
    Location
    USA
    Posts
    23
    How many times can we talk about the same thing? Well, your article is somehow different from others, thank you)

  8. #7
    Registered User Junior Member
    Posts
    26
    Great Idea)

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