Self Storage Buildings Can Represent a Good Investment, Under the Right Conditions

From comic books and collectibles to furniture and bulky equipment, the need for a secure, affordable place to store it all is common in metropolitan areas. Mini storage buildings offer a variety of individual units that provide an easy way for people to keep their homes and businesses organized without having to get rid of items that may be needed in the future.

Many leading metal building manufacturers offer mini storage building kits. Similar to the other steel structures these companies provide, self storage kits are typically backed by their industry and technical insight as well as sustainable manufacturing processes that come in a variety of design options.

Storage kits are typically built to serve as a business, leasing the individual units for monthly rental. But businesses have also recently found a way to incorporate them into their locations as well, providing extra space for fixtures and seasonal décor without having to renovate or add on to their existing buildings.

Custom sizes, shapes, and colors

Self storage kits are typically offered in either a pre-designed or custom floor plan. This blueprint enables you to designate the total space you have available and then divide that by the number of units you need. As someone who is considering building a self storage rental facility, you’ll want to consider a variety of shapes and sizes to achieve the ideal unit mix design that will generate the highest return on your mini-storage investment.

Common examples of floor plans include:

MixWidthLengthHeightTotal Units
Small / Medium Units 20' 120' 8'6" 16
Small / Medium Units 20' 100' 8'6" 18
Medium / Large Units 30' 100' 8'6" 23
Medium / Large Units 30' 150' 8'6" 32
Oversize Units (Boats and RVs) 30' 120' 12' 10

 

It’s worth noting that widths are commonly available in measurements of 10’ to 200’ feet wide and often come in 5-foot increments. Gable and single slope design are standard, typically including a 1/2:12 minimum slope and an 8-foot, 6-inch ceiling height. Max loads are region specific and must adhere to local building codes. With this in mind, many steel structures accommodate ground snow up to 100 lbs., and a wind load of up to 150 mph.

In terms of the materials, expect at least 26-gauge R-Loc for the partitions and 24-gauge standing seams that will either be colored or Galvalume – a 55% aluminum-zinc alloy coated sheet steel. Trim is also commonly included as part of a quality mini storage building kit given the necessity of channeling rain water away from the units. This will usually encompass rake trim, gutters, and downspouts, all of which are manufactured from 26-gauge steel.

Buying a self storage business

In the past 10 years, the market for purchasing a self-storage business has changed dramatically. Due diligence is critical to analyze the profitability of the venture, carefully taking into account capitalization rates, self-storage appraisals, and the variables that factor into property value. To name just a few of the biggest concerns that affect the value of the physical property, you should consider:

  • Environmental issues
  • Structural viability and necessary repairs
  • Permits
  • Personal property, including golf cart or ATV, computers, and any electronic surveillance equipment
  • On-site management team

NOTE: it’s reportedly extremely difficult to run a self storage business from a kiosk. Unlike other businesses, this venture requires on-site personnel.

On the whole, it’s estimated that the most profitable self storage building facilities are those with a minimum of 400 units, according to an article published on NuWire Investor. This size setup provides ample revenue for the staff and all additional costs that are required to run it.

To turn the greatest profit, evaluate the surrounding community and select a site that’s situated in an area with no more than 6 square feet of storage space for every person living there, the NuWire Investor article advises. For example, a population of 200,000 people should have no more than 1,200,000 square feet of storage space available. Any more than this and the area is considered over-built in terms of self storage – an environment that will find you always struggling to maintain your occupancy rate. The best opportunities are those found in areas with less than 6 square feet of available space.

Another criterion for profitability is a rental rate that’s around $1 per square foot, a number that reportedly maximizes profitability in most locales.

What you can expect to pay

Averaging current prices from around the United States, here are a few mini storage buildings for sale, what they cost, and what you get for your money:

  • Small: 72 steel units including 5’x10’, 10’x10’, 10’x15’, and 10’x20’, located on 3.5 acres in a rural area with no competition. Estimated gross annual income: $100,000. Asking price: $605,000.
  • Mid-range: 107 metal storage units on concrete slabs, totaling 12,600 square feet and divided into 24 5’x10’ units, 12 10’x10’ units, 52 10’x15’ units, and four 10’x20’ units. Located on 2.32 acres. Estimated gross annual income: $60,000. Asking price: $395,000.
  • Large: 201 storage units with property located on a high-traffic highway close to town and local airport. Low overhead and consistent occupancy. Estimated gross annual income: not provided. Asking price: $995,000.