How to Get Started in the Self-storage Industry
As with all businesses, the storage sector was born out of necessity. Humans have always been able to store their stuff. Historical evidence suggests that there were public storage facilities in Ancient China. People’s demand for secure storage has increased exponentially over the years. Modern storage facilities are now commonplace in Florida. They were developed in the late 1950s. Self storage near me units are becoming more popular each year. In the 1990’s storage demand was at its highest point. With the increase in storage space, there was a rush to create new facilities throughout the US. The New York Times published a 2009 report (“The Self Storage Self “), stating that from 2000 to 2005, over three thousand storage facilities were constructed each year. Storage is still in high demand. The Self Storage Association (SSA), reported that self storage businesses offer 2.3 billion square feet. It is more than three times as large as Manhattan in terms of square footage. One in ten US households rent storage space.
All these statistics could lead you to be curious about getting your own piece of the self-storage pie. What are the benefits and what is the cost?
It is important to research the best location for storage. A successful self storage business depends on its location. When searching for the right location, it is important that you consider costs, property taxes, as well as zoning regulations. You should do your research about the property before you buy it. Entrepreneurs and land owners who have large tracts of land have built many self-storage buildings in the past decade. These facilities can be a poor investment as they are located in areas that are densely populated, which restricts the number of clients. You will attract more clients if you have a well-located facility. This will also increase your return on investment. The first year will bring 6.75 returns on your investment.
A significant initial investment is required to open a self storage company. National lenders may offer financing. Many people in the industry recommend Wells Fargo’s Self-Storage Division. Wells Fargo offers programs to self-storage business owners. The mini-perm is one program that offers interest-only for the first two years, followed by three years of amortization. As you reach certain debt coverage goals, the amortization progresses over the next three years. This loan is among the best. It is recommended to use a mini-perm loans because you may only need to finish your project in a year. However, filling the units could take years. Finding a loan after construction would be extremely difficult.