Self Storage Idea

[Engelo Rumora]

G'Day everyone,

I hope you're all well.

Quick question...

I would like to learn more about self storage units from others that have or currently are investing in them.

Is it possible to buy 10 shipping containers, place them on an empty lot. Get a groovy brand going and start renting them out.

I can probably buy a lot on a busy road here in Toledo for around $10k. 

10 shipping containers would cost me another $10k

Fencing, Paint, Gravel, Website, Branding and Signage another $10k

So total investment would be around $30k

I was thinking of renting every container for $150pm.

Very sexy ROI.

What am I missing???

Thanks and your replies would be much appreciated.

[Scott Meyers]

WHOA Engelo.....

And others - Yes, this is a great business model, and shipping containers work, but to spend $1,000, $30,000 or $1 Million thinking you can create demand is a BAD idea. 

Besides, Your #'s are off. 

I have A great deal of experience here, so I'll share a few things everybody missed. 

A CONVERTED Shipping container will run around $3,000. This is for a 40ft. Container with a wall and 2 roll-up doors.  Nobody wants to rent a shipping container as-is (the $1,000 unit you mentioned) and try to swing that big door open.  

You will need more than $10k for that site - it needs to be graded, leveled, graveled, and you need 2 rows of concrete footers to set the units on.  Otherwise they'll shift, sink, and then the doors won't open. 

A "Catchy Brand" is great, but you can't manufacture demand for storage.  It's a needs driven business, think about it.  

I also highly recommend you start with a feasibility study that looks at the market within a 5 mile radius to determine the population and the # of competitors, and ultimately, provide a sf per person ratio, BEFORE you decide to build this - otherwise, if the market is oversupplied, You're sunk before you begin - or at least it won't be as profitable as you think. 

Zoning - You need to have zoning for Outdoor parking/and or outdoor storage.  Some areas will also zone these as a holding yard (if you're using nothing but shipping containers) just like you would find in a port city that houses these shipping containers.  

$150 per month - how does that compare to your competition?  How much are they charging per foot?   Maybe you can get $163,  Maybe the market will only bare $78. 

As for Toledo, we had a vacant Wal-mart under contract for $6/sf that we were going to buy and convert to Self-Storage.  After we received our Feasibility study and completed the first phase of due diligence, we decided to pull out - the demand and the demographics just wouldn't support it. 

THe beauty of sites built with converted shipping containers is that it is totally scalable, less expensive to develop, and you don't pay property taxes - they're mobile. 

But You need to do a LOT more homework before you just buy a lot and throw some containers on it and put up a free godaddy website. 

If you want to learn about the business, a good resource is  www.SelfStorageInvesting.com.  You can also attend the Self Storage Academy and the SSA and ISS Trade Shows. 

Keep us posted.