How to Start a Storage Unit Business

The self-storage industry is absolutely booming. But of course, you knew that already, that’s why you clicked on our incredibly helpful article on how to start a storage unit business!

It’s one of those rare industries that is largely recession-proof[1]. Why? Because when you need extra storage, you need it. It’s pretty hard to find alternatives — especially as affordable as self-storage units are. So of course, investing in the opportunity might be a smart move for you.

But, slow down there! You might be excited at the prospect of building a storage unit business, but there’s a lot of work that goes into it. Lucky for you, we have all the tips and tricks you need to put you on the fast track.

We’re sharing our insider info on some of the most popular self-storage business models and showing you how to leverage your self-storage business plan to get funding for your business if you currently have no capital.

So grab your notebook, download a free self-storage business plan template (you’ll thank us later), put on some lo-fi music, and get ready to be schooled.

How To Start A Storage Unit Business Without Money

We’re starting with the burning question first: _How to start a storage unit business without money_. After all, it’s a great opportunity — why should all the rich guys get to have all the fun? Here are a few ideas for you to raise the money you need to start your self-storage business.

First things first, you need a self-storage business plan. Funding your self-storage business means getting other people to buy into your vision. A business plan not only lets them know what to expect but also shows your dedication to make your storage unit business successful. If you haven’t already found a self-storage business template, now's the time. To find a public storage business plan, search online for a storage facility business plan example or a self-storage business plan doc that you can download for reference when creating your own plan.

Next question: how much does it cost to start a storage unit business? That number depends on many factors including your location and how big the facility is. Google is your friend here. Research every storage unit business for sale in your area to get an idea of the current market. You’ll also need to factor in other expenses outlined in your self-storage unit business plan, such as utilities, renovation, infrastructure, and personnel. If you buy an existing self-storage unit business, some of your initial costs may be less, but only if the property doesn't require extensive renovations.

Finally, it’s time to open some pockets. There are a few different sources you can turn to when securing funding for your storage unit business, such as:

Finding a private/angel investor that sees promise in your business plan.
Getting a business loan from your bank or credit union (credit union interest rates tend to be lower for members).
Applying for a small business grant from the Small Business Administration (SBA). Note: Grants aren't available in all locations and are often difficult to obtain.
Asking more affluent friends and family members if they'd like to own a share.
Going on Shark Tank and pitching your idea — but it better have an incredibly unique spin for your storage unit business if you want to try this one!)

Your Annual Income Owning Storage Units

You can use management software to improve your facility's operations and make life much easier for your property manager.

Ok so you’ve secured the bag, that’s the big challenge out of the way. Now it’s time to delve into some of the finer details when starting your storage unit business. Let’s start with how much annual income owning storage units can make you. Because let’s face it, money makes the world go round and you’re looking for a piece of the pie.

It’s pretty hard to pinpoint an exact profit margin for self-storage businesses as there are so many criteria to consider but estimates place profit between $350,000 - $800,000, with around $185,000 for the owner annually.

But this all depends on occupancy rate, demand in your area, how many storage units you have, and your overhead costs. Basically, the more units you have and can fill, the more money you can expect to take home each year.

If you want to play around with the numbers, you can use a storage unit income calculator to see how different variables will affect your annual take-home.

How To Buy A Storage Unit Business

One of the biggest hoops you’ll need to jump is buying your storage unit business. And if you’ve never bought a property before, it can be overwhelming.

Step one is finding a property. You’ve done your market research and decided on the rough area to put your roots down. The two best ways to find self-storage properties for sale in your area are to either look online or visit property auctions. This will show you what’s currently available and is usually the best route for self-storage investing for beginners like yourself. You’ll likely find more opportunities for renting than buying, leading you to wonder “Can you buy a storage unit instead of renting?” And the answer is yes! You just might need to widen your search area a little and be a bit more flexible with your wish list.

Before you make an offer on a self-storage unit business property, you should always see it in person. You need to make sure the building is as advertised and doesn't have any unwanted “secrets” … the only way to know for sure is to see it in person. It’s a good idea to bring someone with you. Score bonus points if you can get someone with a background in real estate or contracting who has a keen eye for spotting problems in a property.

Once you have your dream storage unit business property locked in, you’ll need to make an offer. If you’re going through a realtor, it will be a smoother ride, but if you’re going through an auction company, it’s a good idea to read up on how to buy a storage unit at auction so you feel confident when bidding.

Pros and Cons of Owning Storage Units

At this point, you’re a pro on how to buy a storage unit business. But I’m sure you have more questions. Like how much does it cost to start a storage unit business? What's the average annual income owning storage units in Texas? What's the feasibility of starting a self-storage business in Canada?

While we can’t give you the answers to every burning niche question in this article, what we can do is take you through the pros and cons of owning storage units so you can make an informed decision on your entrepreneurial future.

Pros

Once you have your business infrastructure in place, it’s a relatively “hands-off” job, so you can set flexible hours for a better work-life balance.
There is always a high demand for storage units.
An opportunity to expand your business into other areas such as renting vans and parking lots.
There are potential tax benefits of owning storage units through Bonus Depreciation (you should enquire with a financial advisor to understand your own circumstances).

Cons

Choosing the wrong location makes it tricky to find customers
You can’t guarantee your occupancy rates
You WILL encounter tenancy problems at some point
There is a lot of competition in the self-storage industry

Buying a Self-Storage Franchise

If you’ve ever worried about how much it costs to buy a storage facility but don’t want to rent, finding a self-storage franchise for sale might be the option for you.

The benefits of self-storage franchises are:

It’s easier to get investors on board for your project
Mentorship from people with essential industry experience
Access to the franchise infrastructure which will help you get started quickly while cutting start-up costs
Instant brand recognition, giving you an upper hand against competition in your area
More likely to see profits quicker

However, it’s not all upsides. Franchising means you’ll have certain policies and codes of conduct you have to abide by in line with the franchisor. You also have to pay for your franchising rights which could be anywhere from $10,000 to $100,000 depending on your location, the size of your facility, and the brand. This cost will often cover essential infrastructure and access to a mentor. Which, depending on your current level of knowledge, confidence and goals, may be worth the cost.

Self-Storage Business Models.

Call us biased, but we believe starting a storage unit business is a lucrative business that can birth an incredible career for you. And you can start today by creating a self-storage business plan that will act as the blueprint for your success.

Make sure you’ve studied the various types of self-storage business models currently being used by successful companies and researched self-storage businesses for sale so you can make the best profitable self-storage plan.

Is owning a storage unit business profitable? Absolutely, but you've got to put in the work and now that we’ve given you the answers to some of the hardest questions, we hope you have the confidence to start taking your first steps.

And once you’re ready to take your self-storage business online, don’t forget, at Adverank, we help our customers use Google PPC ads and other innovative marketing tools to drive customers to your self-storage business.

Good luck, we know you’ve got this!

SOURCES:

[1] https://www.multihousingnews.com/why-self-storage-is-steady-despite-economic-bumps/

[2]https://irellc.com/resource/how-much-income-self-storage-facilities-generate/

Making Space for Success: How to Start a Storage Unit Business

The self-storage industry is absolutely booming. But of course, you knew that already, that’s why you clicked on our incredibly helpful article on how to start a storage unit business!