The mini-storage business is ripe with opportunity and the business model is proven as a consistent money generator. Starting the mini storage business is not easy. You will need real estate and the capital to build the actual units.
The startup costs are high, while the maintenance and operating costs are low, compared to other real estate rental and leasing operations.
Before making the large, upfront investment on land and construction, do a thorough assessment of the market. Start by calling the local storage unit and asking about availability.
You might discover that the market has little availability but that it looks good for another set of units.
If you find availability at the greatest number of units in the area – competing is more difficult – but you can still edge into the market and build a profitable venture.
Look for areas that have transient populations which shift housing regularly.
Areas with low occupancy rates in housing markets will see a higher number of individuals seeking storage.
Colleges and seasonal workforce regions are also perfect for a storage unit business. As people shift between temporary housing, they need storage for their possessions.
LOOK FOR THE RIGHT SPACE FOR THE STORAGE BUSINESS
Finding land for a storage business requires a whole lot of research!
The land is expensive and you will require commercial zoning to build the units.
There are two fundamental approaches to purchasing land for a storage business. You can look in high traffic areas within the city.
These will fill the units quickly, but the land investment is high. You can also look outside of the city, on the periphery.
The land investment is often less when you move outside of a city; often, this means mean fewer barriers for permitting the business.
Rural storage units are also viable, but you must really dig into the market and know the demand before launching the business.
Lastly, look for land that is workable.
Drainage is the biggest challenge as your units must remain dry and secure to protect the possessions stored within each unit.
Building in a floodplain or in a low-lying area means that your construction costs will inflate for developing the land while also implementing drainage.
WORK ON FINDING THE RIGHT CLIENTS FOR YOUR BUSINESS
It starts with the dirt work that sets up the drainage; creating rows for driving between units and the actual pads upon which the units are erected.
Construction businesses specializing in storage unit construction exist and their experience makes them a valuable construction resource.
Storage units are a prime target for thieves because valuables are sitting idle in a concentrated area with a low amount of foot traffic.
A large security fence with razor wire deters climbing over the fence.
A security gate that has electronic entry codes creates a tracking system for entry and exit. Lastly, a system of security cameras will monitor the space.
We also have some home storage ideas in store for you! Adding a small office with security and yourself or a staff member is also useful.
FIND THE RIGHT AMOUNT OF MONEY TO FINANCE YOUR BUSINESS
You may be able to do this by yourself.
However, before you put your project under contract, it’s prudent to know what type and how large of a loan for which you can qualify.
Remember, you can use the income from the project as your income for qualifying in most cases.
Also, there is a heap of available options for loans out there! Loans are a great way for someone new to the industry to get more financing than from a traditional bank. Check-in with a lender or two prior to writing your first contract.