With a whopping 1.6+ billion square feet currently available in self-storage units, 43.7 million square feet built in 2021, and a projected 50.4 million square feet to be added in 2022, it’s clear that Americans have a LOT of stuff.
With that, a rising trend is being seized by opportunistic entrepreneurs and investors.
The opportunity? Rental storage facilities. The question? ‘Where do I possibly begin?’
Self-storage facilities are rising in popularity as a business investment as rental income can be extremely lucrative. Renters pay – usually by the month – to store their stuff in units of various sizes. It could be furniture, art, appliances, TVs, documents, holiday decorations, wine, vehicles, boats, or RVs. Similarly, small businesses can rely on self-storage units to store their business equipment, inventory, and supplies. Some customers even have converted self-storage units into high-end gyms or hide-out bars. You name it, the possibilities are endless.
Another rapidly growing department (partly due to Covid-19 and with help of Millenials and GenX)? RV’s, Toys, and Boat Storage. The popular RV brand Winnebago is currently holding on to a whopping $4.4 billion in backlog orders. Their Q2 earnings report has shown this trend will continue to rise which means storage facilities will be in high demand.
While facility types will vary and affect your income possibilities, partnering with a reputable consultant through it all is key. You’ll want to take into account things like their process for mapping out construction and forecasting revenue, the ease in which the entire process will unfold, and future opportunities that you’ll be granted after your facility is up and running.
On the other hand, the cost of deciding to build (without a consultant) can have vast consequences. Don’t be the entrepreneur caught saying ‘well, no one told me that!’ as the unequipped construction provider over-charges you for unnecessary additions. When potential buyers decide to make the first leap, they’re usually bombarded by new suppliers who (oftentimes) just have their own self-interest in mind.
Weigh your opportunity costs thoroughly and carefully. Consider what can be gained when partnering with a trusted advisor and what could be lost without one. When in doubt reach out to the trusted advisors at S3 Partners for a complimentary consultation.