Due to its growth in recent years, the self-storage industry has a reputation for being one of the most financially rewarding business opportunities in the real estate sector. Its viability continues to get the attention of business developers and Wall Street players.
The fame of self-storage as a viable investment and business opportunity continues to affect the balance of the market as new structures and businesses get built every day.
In a study by SpareFoot, the storage industry generated about $39 billion in revenue in 2019, featuring between 45,000 and 60,000 facilities and over 1.7 billion square feet of leasable storage space. These figures continue to increase as the demand for self-storage keeps hitting new highs.
Unlike before, when the competition was minimal, it has become essential for anyone considering delving into self-storage to embark on comprehensive research of the market and competition.
Doing this will ensure that the business owner has an easier time building a customer base.
Before we go further, let us look at some skills required to run a self-storage business.
Skills Required to Run a Self-Storage Business
A self-storage business is one with significant investment potential. Running it doesn’t require a university degree, nor does it need knowing all the big English words. However, having some skills and business acumen can be highly beneficial in this market. We’ll examine some of such skills below.
1.Customer Service Skills
Owning a self-storage facility and business revolves around providing value for people (customers). Knowing how to serve them and putting it into action is a skill to possess. As a business owner, you’ll need to engage and interact with customers.
Having strong customer service skills encourages your clients to return in the future and keep doing business with you.
2.Organization Skills
Investing in a self-storage business and running it requires that you show excellent organization skills. You need to maintain orderliness in the various areas of the venture. Rental agreements, bills, maintenance schedules, etc., must follow an organized pattern to promote transparency and accountability.
3.Attention to Detail
There’re people and agents in the self-storage market that are always looking for opportunities to get one over you. It could be the owner of a target facility or their broker. You must always pay utmost attention to detail. Don’t overlook any area as it might be a loophole. Focus on the proper management rental agreements ad put in place adequate security measures for the property.
4.Tech Savviness
In a constantly evolving world run by technology, tech-savviness will give you an edge over the competition. This skill is helpful in several aspects of the business, including marketing, security, maintenance, etc. As someone interested in buying a storage business, you can’t afford to be blindsided – you’ve got to keep up with current market trends to achieve significant success in the endeavor.
Steps to Follow in Investing in a Self-Storage Business
Buying self-storage real estate is a significant undertaking, one that requires extensive and planning. You don’t merely wake up one day and decide to invest in a capital-intensive business like self-storage – you might encounter massive failure.
Investing in a self-storage business takes several processes and steps. We’ll examine some of them below.
1.Craft a Business Plan
Once you’ve decided to start a self-storage business, the next thing to do is develop a viable business plan. This write-up details how you intend to run the venture, handle its essential aspects, and generate massive returns from it. It also explains how you intend to find the investment, manage the facility and marketing strategies you intend to adopt.
A well-written self-storage business plan helps you secure financing. It forces you to devise a method for handling things like construction costs, competitors, occupancy rates, and a host of others. If you’re going to be looking up to banks and other investors for financing, preparing a business plan is non-negotiable.
2.Decide on the Type of Business Entity to Form
Every business operates as an entity. It’s what determines how the public, government, and investors see them. A business can act as a sole proprietorship, partnership, a Limited Liability Company, or a corporation. Each of these classifications has its features and pros and cons.
Once you’ve successfully crafted a viable business plan, forming a business entity is the next step. It determines the type of business classification you intend to run.
3.Dignify the Business with a Name
A name gives identity to an idea or a business. It gives your venture a note of genuineness and authenticity. Naming your business is the next step to take after you’ve decided on the type of entity to operate.
However, you don’t assign just about any name to your business. It has to be an appellation that resonates with customers and is also available for usage. Take your time to come up with a befitting name for your brand.
4.Select a Suitable Location
Did you observe that we added “suitable?” That’s because the location you situate your self-storage business matters. Significant effort must go into finding an ideal environment for your venture. You don’t want to buy your facility in an environment that’s likely to diminish its value.
An ideal location offers much-needed traffic, boosts the property’s worth, and provides access to a booming market.
5.Get the Permits and Licenses
Besides zoning, operating a self-storage business doesn’t require specific licensing. However, there’re registrations that you may have to do at the local, state, and federal levels. Do well to research the standard business permits you need to get for your enterprise.
6.Secure Financing
investing in self storage: passivestorageinvesting.com isn’t an endeavor you can undertake without financial backing. No matter how sound your business idea is and how skillful you might be at running an enterprise without getting the required funding, it all amounts to nothing.
Funding is one of the very first things to consider when planning a self-storage investment. Finance can come from two sources: your account or from a loan.
7.Sign Up for a Business Insurance
We can’t overemphasize the significance of getting business insurance for a self-storage investment. It’s vital as it saves you from unsavory situations that may arise in running the business. A self-storage enterprise requires several types of insurance, ranging from the one for general liability to the one that helps cover losses arising from a robbery.
Other steps to follow include hiring qualified employees, setting up an accounting system, crafting effective making strategies, and opening a bank account.
Conclusion
Investing in a self-storage business is a viable investment capable of giving you multiple returns on your investment. However, it goes beyond having the money or a plan. You’ve got to research and follow the steps examined above. If you’re ever confused about things, consider bringing on a self-storage investment broker of top quality.
