Posted: 9/10/2009 7:15:29 PM EDT
| What can anyone tell me about the set up and start up costs? Thanks in advance. |
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Just going out on a limb here....I don't own one. Real estate Construction Commercial real estate taxes Insurance Maintenance Utilities Employees Marketing to and serving people with an over active consumer gene or transient lifestyle does not appeal to me. Rough order of magnitude / bar napkin math I figure you are going to need $1.5 million to start and have a fairly long term event horizon to profitability. The majority of the profit would probably come form the long term holding of the commercial real estate. |
| I have a nephew who is big on designing building and construction of these units. According to him there is no money in it at this time. He has made a real fortune in it in past years, so I'm quite sure he knows what he is talking about. I'd say if and when commercial construction becomes profitable again this question might be reevaluated! |
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I have a very good friend that owns one of these. He has made a ton of money off it. I don't know how it's going right now, but it's still full. You just gotta get paid.
We live in a very rural area, so even in the towns the real estate cost isn't that great. I would guess that he has about $150,000 tied up in a fifty stall storage building. I'm pretty sure he charges about $45 bucks a month for these stalls. They are the small garage type. Upkeep on it is pretty minimal, but he claims that people can be a real pain in the ass about wanting in and out at weird hours. When they don't pay the bill he has a sheriff's sale. I know he doesn't make much on those. He says most of what gets stored should be thrown away. |
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The only one I have a little knowledge on is one that was converted from some other kind of wharehouse type building. Inside they erected the cages and doors to make it into a storage unit. Doing it that way could say some $$ if you can find a good deal on a property. In areas that have HOA's, the cost of putting up some covered or enclosed parking for RV's and boats might be a better investment. Also you could just have some open areas that are charged less. Quoted: That is a good point. If you can correctly guess which way the town is moving, that could be a smart investment in 10-15 yrs.The greatest valiue is probably just throwing off eenough cash to brerak even on the land payment. Buy 20 acres outside of town, wait for development to creep in sell property profit |
| Was a good sideline when the economy was strong. Now people are cutting back in a lot of ways...one being, "Do I really need to pay $75/month to store my junk? Think I'll get rid of it and have one less payment to worry about." Has dropped off about 20% in the last two years. YMMV depending on your local economy. |
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Quoted:
Was a good sideline when the economy was strong. Now people are cutting back in a lot of ways...one being, "Do I really need to pay $75/month to store my junk? Think I'll get rid of it and have one less payment to worry about." Has dropped off about 20% in the last two years. YMMV depending on your local economy. I talked to a previous owner/proprieter of the local storage units. Not only are infestations an issue (think "bed bugs") but the turnover and deadbeat payments are the biggest factor. Another interesting concept is that often there are "conglomerate" storage unit manufacturers who come into an area, build one or more large unit complexes and rent them out cheaper than the pre-existing market. Once they attain a certain high-level occupancy (from under-cutting the competition) they sell off the units and start over building a new place, under-cutting the rent, etc. Oftentimes they do this very near the units they just sold - leaving the private owner to raise raits for "longterm" profitability, etc. My impression is that it's a bit of a shell game - you're only winning if you're selling it to another, bigger loser. |
| My buddy lives in a college town and owns his own heat and air business. He bought a peice of commercial property out of forclosure that had a small store front with a shop space and about an acre of land behind it, so he would have a place to keep parts and do sheet metal work. Since this is his "office" there is always someone there to answer the phone during normal business hours. With all the space he had going unused behind his building he put in two storage buildings that are 20x50 that break down into 5-10x10' lockers at $75/month and 30-5x10 at $40/month last I remember. It cost him about $50k to build since he already had the land. It hovers around 90% occupancy which comes to around $1400/month in cash flow. He won't get rich doing this but it is good passive income and at this point is paid for. If he had more land he could make quite a bit more money storing boats and motorhomes, there's a place by my dads house that does this and it is acres and acres of boats and motorhome at $50/month for a parking spot on the paved lot. |
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One place near me that I have rented from in the past has this as part of many businesses he is involved in.
The guy also rents apartments, houses, and mobile homes out to people. He often uses empty storage units to hold furniture and stuff when he winds up needing a place to put some of his stuff. He has several folks working for him, some just do any kind of repair and others are more the secretary type who just answer phones and take rental payments. I can't keep up with everything this fella is into and I don't know him that well so I expect nothing else. When the 4th of july is coming he sets up a couple different places that sell fireworks, in tn you can sell them for maybe a month before the 4th I think. He does all sorts of stuff like that. To some extent it might be worth the money and time if you already have some space, like the post above with the storage units behind an office that is always occupied. Around here a lot of the storage units are not getting paid for each month and they go up for auction at some point. I am talking about one person not paying rent, not some huge storage unit setup with 50 units going up for auction. |