Self Storage Millionaire

This is part III in the series, Why Invest in Self Storage?

VERSATILE: Self Storage can meet you where you are.

LEVELS OF ENTRY: If you are just getting started and have little capital, you can start a small facility and build it in stages. This allows you to get started with little to no capital. The Self Storage business has a low barrier of entry.

On the other hand, if you have already made money and simply need a place to put it in order to earn a decent return, an existing, stable self storage facility can provide you with a nice return on your money. There are opportunities for self storage facilities in every corner of North America – and the industry is expanding world wide.

REASON FOR INVESTING: There are several different strategies you can implement in your self storage business plan. You can put a strategy in place that grows your net worth and capital quickly – or you can go with a plan for passive residual income. For more specific information on specific investment strategies, buy the book!

Technorati Tags: Get Started in Self Storage Business, invest in self storage, Start a Self Storage

The Inside Self Storage Expo is right around the corner!

The Expo will be Hosted at the Gaylord Opryland Resort and Convention Center in Nashville, Tenn., Oct. 7-10, If you are starting a self storage business, attending this expo will give you a jump start!

For more info, go to: Self Storage Expo

Technorati Tags: self storage business events

This is part two in the series, Why Invest in Self Storage?

Today….

SELF STORAGE IS RECESSION RESISTANT: Historically, the self storage industry does better during a recession than many other kinds of real estate. When the economy goes through a downturn, people will often downsize their housing, but they don’t want to part with their possessions. Self Storage becomes the answer for them. Recessions also often mean that a larger number of the population will move. People find themselves needing to relocate to find a new job, or to live in an area with a lower cost of living. This too, increases the demand for self storage facilities.

Of course, nothing is guaranteed. Some self storage businesses have seen a fall off in business during a recession. Why? Some families choose to tighten the belt and eliminate the “disposable” expense. However, when this occurs, it is often less pronounced then you see in many other sectors. In fact, The Motley Fool has identified a few stocks that “Took a Hike” – - and wouldn’t you know it? Two of the Four mentioned in the article are Self Storage Businesses!

This is Part II in the Why Invest in Self Storage series.

Technorati Tags: invest in self storage, self storage recession

If you are interested in starting a self storage business, you have come to the right place.  Read the blog, join the forums to ask our self storage insiders,  network with other’s interested in self storage,  and submit a pre-order form for the book! Welcome to Self Storage Millionaire!

Each quarter, MiniCo Publishing, The Parham Group, and Cushman & Wakefield, Inc put out a survey to self storage owners. The results are complied and put into what they call the Self Storage Confidence Index.

A survey such as this is interesting, because it really isn’t about “hard data.” Rather, it is about how current owners feel about the future of their business. There is some value in that, I guess – but it is important to distinguish between how current owners “feel” about the future, and what is actually occuring.

Take the topic of rental rates, for example:

In the 3rd quarter results, 59.6% of owners felt that rates would go up. Another 23% felt that rates would remain the same. 17.3% felt that rates would go down. Interesting to know, but the report goes on to reveal:

“Comparing second quarter 2008 with the same quarter 2007, 51.4 percent of respondents indicate rental rates have increased, and a third indicate rates have stayed constant. Of the respondents, 12.3 percent report rate decreases from the same quarter last year. All these figures are slightly down from last quarter’s year-to-year figures.”

That information just packs more of a punch for me. I would rather know what is actually happening.

Get the entire report at:  http://www.selfstorageconfidenceindex.com/US_3Q.html

Technorati Tags: self storage business, self storage industry

Over the next few days, I will be posting a series – - reasons to consider investing in a self storage business.

Reason #1 to Start a Self Storage Business:

PASSIVE INCOME: Many people that are interested in real estate are really interested in passive income. A Self Storage business can provide a fairly passive and stable income for investors. Many people have used a self storage business as a retirement plan. They buy or start a self storage business during their working years, then live off the income when they reach retirement age.  Other’s have a more aggressive investing plan.  They may develop  multiple self storage businesses so that they see the payoff more quickly.

While managing a self storage business does take some work, it is not as labor intensive as owning a residential investment property, and most of the work is easily taken care of with either an employee or technology.  It is pretty easy to make your self storage business a passive income generator.

Technorati Tags: passive income, self storage business

We have all heard about the sub-prime mess and how it is currently influencing lending practices.  But what is happening in the commercial lending world?  Well, a few weeks ago, we had a conversation with a commercial loan broker.  It was an interesting conversation!

Here are some of the changes that have taken place over the last few years in the world of getting financing for a self storage buisness:

3 Years ago:  Conduit loans were available for about 6%.  These loans were available for facilities that would have a loan of $1,000,000 or more.

Today:   This loan product is now available for 7% – 9%.  The minimum loan amount has also been raised to $2,000,000.

3 Years ago:  Local banks were offering financing to self storage facilities.  Of course, the rate is highly dependent upon the bank and the relationship the bank has with the person applying for the loan, but generally speaking, these banks were offering an interest rate of 7.5% – 9.5%.

Now:  Local banks are financing self storage facilities at 6%.

We have had a complete reversal in the last few years.  I wonder what will be next?

Technorati Tags: self storage development, self storage financing

We track the source of new business by asking our new clients how they found us.  As with many industries today, it is clear that our customers are moving away from yellow pages and toward the internet.  Our personal numbers indicate that a large percentage of people are finding out about us from internet searches.

It looks like atleast one self storage software company has picked up on the trend.

Centershift is now offering a website and SEO (Search Engine Optimization) service along with their self storage management software.  Read more about the partnership here!

Great move guys!

Technorati Tags: self storage management, self storage software

When you are considering the management question (DIY, hire an employee, or hire a management company) keep in mind the technology that is available to you.  A wise use of technology can increase your efficiency ten fold.

CELL PHONES:   I know, cutting edge technology, right?   We use a cell phone for our self storage business phone calls.  This allows us to be away from the office, but still take care of business.

REMOTE CONTROL:  Occasionally someone calls and needs to be let into the facility (the gate has them locked out).  Rather than getting in the car and driving down to the facility, we can log into the office computer and change their status in the gate software.   The entire process takes 2 minutes, and I can go about my day!

KIOSK:  We use an Insomniac Kiosk at our self storage businesses.  This kiosk looks similar to an ATM machine.   It allows a new customer to sign a lease and move into a unit, and buy a lock.  It also allows current customers to look up their account and pay their bill.   Often, we will have new customers move in, and we had no idea they were even considering using our self storage business.    It is fun to go down and collect our money for the week and see that we have new customers.  Talk about passive income!

Technorati Tags: self storage management, technology

When we started our first self storage business, we handled all the management ourselves. It can be a great way to go if you have limited funds for your first facility. It can feel a little daunting to think about coming up with payroll for an employee.

We used a cell phone and routed all the storage calls to that phone. That way, we knew we could go about “life as usual” but we would still make sure that business was being taken care of. When someone called to rent a unit or pay a bill, we could either arrange things over the phone, or schedule a time to go down and meet them.

It is difficult to try to estimate how many hours per week we had to work on the self storage business. Sometimes it was as little as one or two. Other times, it may have been closer to five to ten.

Working the self storage business ourselves gave us the immediate knowledge of the “ins and outs” of managing a self storage facility.

On another facility, we made the decision to hire an office manager. We have noticed that customers really like having someone onsite during regular business hours. It makes it easier for them to drop by and pay a bill, get a unit or ask a question.

Having someone at your self storage business during regular business hours opens the doors for additional sources of revenue as well. If you have the space, you could consider a contract with Uhaul or Budget truck rentals. These companies require someone to be onsite during regular business hours, but they are an additional source of revenue. You could also get into records management with a full time staff person. (I’ll cover that topic soon).

Our office staff does not have enough storage related work to keep her busy all the time. We made the decision to hire her as a “personal assistant” as well. When she has done all the storage business for the day, we have a list of other items that will keep her busy for the rest of the day… (and make our life easier in the process!)

When you are making the choice between doing it yourself, and hiring an office person, here are some things to ask yourself:

• How much time do I have to manage the facility myself?
• What would a full time office person cost me a month? (remember to include all your payroll taxes)
• What other revenue sources would be available to me?
• After considering additional revenue and expense, how would this decision affect the bottom line?

Of course, these two options are not the only option. Some people opt to hire a management company. Other’s decide they would like to have a live-in manager for their self storage facility.

Technorati Tags: self storage management