The Appeal of Self-Storage Facilities for First-Time Business Owners
Because operating self-storage facilities is easier, safer, and more profitable than many other start-up businesses. Learn more about owning a storage unit business below.
Five Reasons to Choose a Self-Storage Facility
First, starting a self-storage business involves far less initial capital than most other real estate ventures.
Secondly, lenders look favorably on start-up storage unit businesses because of their tremendous success rate.
In fact, down payments may run as low as 25% for conventional business loans. Better yet, Small Business Association (SBA) loans may require as little as 10% down.
Thirdly, operating a self-storage facility is straightforward. It requires little previous experience. However, if needed, operational training is also readily available. For example, the Self Storage Association (SSA) offers online certification classes in self-storage management.
Fourthly, independent operators own a whopping 75% of all self-storage businesses. Nevertheless, many self-storage franchise opportunities also exist.
In a franchise operation, the company handles the marketing. That relieves the owner of one major responsibility.
On the down side, the franchise company also requires royalties for the use of their name and system.
Finally, unlike residential real estate ventures, well-built steel self-storage facilities demand very little upkeep and maintenance.
Self-Storage Units are a Safer Investment
Naturally, no business promises a risk-free ride. However, with self-storage the odds are in your favor.
According to Investopedia, 50% new business ventures fail in the first five years. Still, an amazing 92% of self-storage startups succeed.
No wonder banks eagerly finance loans for storage unit businesses!
Better yet, mini warehouse businesses reap an average 11% profit margin, according to SpareFoot. By comparison, restaurants generate a meager 3% to 5% profit.
Self-Storage Business Outlook
Americans’ reluctance to jettison their stuff is legendary. Consequently, the self-storage market continues to grow at an astounding rate.
- According to the SSA, 85 million Americans now rent storage space.
- USA Today says 14% of all Americans move each year. Many movers rent extra space to store the overflow.
- Market Watch expects the self-storage market to enjoy a 5% per year growth rate through at least 2023.
- Many renters procrastinate about clearing out the stored items. On average, renters keep their units for over three years.
- Self-storage owners confiscate all the stuff stored in the units of non-paying renters. The owners then auction the goods off for a profit.
And who is driving the need for rental space? Here are a few examples:
- Kids returning home after college, job loss, or divorce
- Downsizing baby boomers
- The families of elderly Americans moving into assisted care facilities
- Military personnel
(In fact, the military makes up 10% of storage clientele. EZ Storage says the military claims 95% of the self-storage units near bases.)
Self-Storage Business Facts
SSA states that the average size of self-storage facilities in the U.S. is 546 units.
However, starting with a great location with ample room to expand allows new facilities to start smaller and grow as needed.
Typically, a self-storage facility still makes a profit at 60% to 70% of full occupancy. Currently, the industry average occupancy stands near 90%, according to Statista. Nevertheless, experts say it takes one to two years to reach 90% capacity.
Construct Your Self-Storage Facility with RHINO Metal Storage Buildings
Self-storage businesses prefer prefabricated steel storage buildings for their facilities. RHINO Steel Building Systems deliver the features operators demand.
RHINO storage building units are:
- Energy efficient when insulated
- Fast to erect
- Less expensive to insure long term
- Simple to clean and maintain
- Suitable for one or two-story operations
In addition, RHINO’s structures include many superior waterproofing features— at no additional charge.
RHINO’s Pro-Value insulation system chops utility bills in half on climate-controlled facilities.
Our self-storage buildings arrive clearly marked and ready to assemble.
RHINO ships prefab self-storage systems and other commercial steel buildings all across North America. Each order ships from the nearest factory to reduce freight costs.
There is no better time than right now to open your own self-storage start-up business.
There is no better structural system for self-storage units than RHINO.
RHINO Metal Storage Buildings for Every Commercial Enterprise
Please call the RHINO hotline— 940.383.9566— now for details, pricing, and expert advice. We deliver top-quality metal storage buildings and commercial structures.
Trust RHINO for the best deal in steel and how to start a storage facility business!
(Updated 11-26-2019. Originally published 5-20-2016.)