Self Storage- Product Mix Risk Management

[Henry Clark]

Stopped for lunch and to warm up.  Gotta love Runza.

Thought I would knock out a post while warming up.  -19 low and -3 high.   Gotta buy our tickets to Belize.

I try to always tell people to calculate failure when they do an investment.  But it is better to mitigate failure up front. When it comes to self storage Product Mix along with a Demand analysis dictate your risk.  Read my post “Will they come?” to see how we do demand analysis.      

Product mix for Selfstorage can cover the following gamut. Depends on zoning if allowed.

If it’s a new location I always like starting with 30 wide drive up access units. You can move the inner wall partition and have 15/15 or 10/20 units.  Can also put end units but they cost more. I don’t like 5x10 sizes because they don’t have much of value and that is where most of our problem clients rent.  

Later after you are successful in phase 1 you might do a 40 wide building with 20/20 wall split.  Don’t like 25 or 30 depths.  If someone “needs” that deep for a vehicle or boat, I would do a 12 wide by 10 tall door way unit building.

Next product is surface parking.  Lay some gravel down.  Mark and number the spots.  Less cost input up front.  You can always convert to storage buildings.  See my post on RV and vehicle parking.
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Also like 20 foot cargo containers either along the perimeter or back to back with driveways in both sides.  You can always sell for about the same price you bought them.  Incrementally.  A building can’t be sold or moved.  No property taxes on cargo containers.  If you find a property with electric highline over it you can’t build under it due to right of way.   But you can do containers and parking.  See my post on cargo containers.

Layout helps mitigate risk.  You don’t know which will fill up the fastest.  I would put regular storage on one side.  Cargo containers on the other side.  Put your parking in the middle towards the cargo container side.  

Now let the market decide your product growth and mix.  

Build or add towards the middle. Storage makes more money than parking.  So if you have to reduce your parking that’s good, you’re making more money.

You can manage your risk upfront.  The more product offerings you have the faster you will maximize your land.  

Might look like Jethro and Ellie May built the location, but I always prefer money over preconceived looks.

If you ever have a chance to build next to a climate controlled location do it.  They will help draw business to you.

Start small and Make Your Big Mistakes First.
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Lunch is over. Time to move some snow.