If you’ve ever thought about owning a self storage facility, there’s never been a better time to start. The success of Bluebird Storage Management is proof that the self storage industry is currently booming, despite the lingering effects of the pandemic and the current global economic blues everyone else is experiencing. And it’s not surprising why.
Starting a self storage business, owning a self storage facility, or getting into storage management in Ontario is a real estate business investment that provides an easy, stress-free, and practical solution to a growing challenge: what do we do with all our stuff?
Storage is necessary to keep valuables safe and organized. But beyond the obvious, that we have too much stuff, self storage facilities also address various issues brought about by unexpected business expansion, or contraction, and of course, life changes.
With the recent economic upheavals, many have to restructure their lives. They are either currently downsizing or in the process of selling their homes and need to store items in a high-security self storage facility.
As for vehicles, the continued rise in fuel prices has forced some to store their extra cars and SUVs in storage facilities equipped with long-term, off site vehicle storage as well where security won’t be a problem.
Purely work-from-home arrangements have modified traditional home spaces. The home office has now displaced extra bedrooms or old storage areas at home and now, even more stuff needs to be put in a self storage unit.
There are also unexpected legacies from family members (what will you do with grandma’s old furniture?) to deal with as well.
Many small businesses have embraced virtual working spaces and need safe and secure storage facilities for all the business records and extra office equipment. Some local businesses also use storage facilities to stash precious business inventory. There are even online entrepreneurs that use their storage units as a staging area for delivery fulfillment.
Finally, the growth in population, matched by shrinking living floor areas, is another factor. Today, there are almost 15 million people living in Ontario and space will soon become a highly prized commodity. The demand for extra storage space will only increase in the years to come.
As with all new business ideas, however, it pays to take some time and check your storage investing options. There are a lot of moving pieces needed to set up a new business, particularly storage management in Ontario and the surrounding areas. We’ve compiled this helpful list of the pros and cons of getting into the storage business.
Today’s high consumption society will increase the demand for storage facilities. Customers are buying more, spoiled by the speed of online transactions and deliveries. Many small businesses now also offer online services, shopping, and more. People will need the extra storage units to keep their items accumulated over the years.
Running a self storage business is generally low maintenance so your administrative and overhead costs are reasonably low.
Customers will typically come in and inquire about rental rates, ask about any insurance policies required, choose payment plans, and rent their storage unit. You probably won’t have to interact with them again until they move in and move out of their self storage unit.
You’ll also save on salary expenses; you won’t need many staff on-site and you can manage operations easily and focus on keeping your property safe and secure.
When running a self storage business, you have the freedom to set your own business hours and make it as flexible as possible. If you are not as hands on running this small business, you can hire staff or extra security to keep your storage facility safe and just visit occasionally. The choice is yours.
Customers will rent self storage units for many reasons including saving on renovation or construction costs, as well as the cost of construction materials, by not having to increase storage space at home.
Keeping all the extra stuff in an off site space will definitely help with the clutter.
Self storage is also a great service to provide for the customer who might be moving homes. They can also access their unit as often as they like for extra convenience.
When you start a self storage business, it will give birth to many other businesses. Of course, the main source of your revenue is the rent from your storage units. But you could also offer the following:
The possibilities are endless.
Self storage facilities in Ontario are perfect for companies that need the extra space to store items such as documents, seasonal equipment, and business inventory. Not only will they be kept secure but also free up space to accommodate their customers better.
Thanks to its unique business structure, self storage facilities do well in both thriving and struggling economies. When the economy is doing well, the self storage market also does well. Many will buy more items, businesses will expand and they will need the storage space. The same thing goes for a bad economy. People will downsize and the extra storage will come in handy.
Where your self storage facility is located is key to your success. It should be in a high-traffic or high-visibility area so prospective tenants can easily find you and get easy access to their storage units.
You can purchase real estate property to build a new facility but you need to make sure before any new construction takes place, its location is in a commercial zone for storage facility use.
A quicker way to get started is to buy an existing facility and change or upgrade the facilities and management systems. But make sure you do your due diligence. Check their historical sales and analyze how they were doing business-wise.
This can give you a clue on how you’ll do as well. If the property is in a poor location, even you won’t be able to turn the business around.
Whichever you choose, take the time to do the proper market research.
Many self storage enterprises have failed due to bad employees and bad management. It’s hard to find the right people to help your business grow. Take the time to vet potential new hires and take a look at your hiring systems as well. Better yet, partner with storage management experts like Bluebird. We’ll help you manage your team, and to listen to their viewpoints and ensure that they stay motivated and engaged.
The high demand for self storage is not enough to ensure the success of your self storage business. You’ll need to give your full commitment by working hard to submit all regulatory requirements, manage staff effectively, implement targeted marketing efforts, and guarantee great customer service.
You’ll also need the capital to cover all the start-up and operational costs of owning a self storage facility. You need to consider all the construction costs and how much it will range per square foot. And if you have investors, you need to be accountable to them and communicate how self storage investing is working out for them based on your revenues.
Self storage units usually come standard with many security features and protocols to keep your customer’s property and valuables safe. You will need to provide:
Customers will expect these amenities before they store their possessions and your competition will have them too. Check if your projected revenues can handle the cost.
The fastest way to turn a profit when owning a self storage facility is to maintain a high occupancy rate. Depending on your market and local self storage industry, comfortable occupancy rates are around 90%.
But this might be a difficult target to hit, considering it is hard to predict unexpected life changes that might force some to give up their storage units.
Once you start operating your self storage facility, prepare to wear your boxing gloves. The self storage industry is highly competitive. There are many large national companies or chains now offering storage management.
Many offer special unit sizes, discounts, and even storage rental promotions depending on the current availability and occupancy rates. But before matching their offers, you need to sit down and crunch the numbers because it might eventually eat into your earnings.
Whatever the business, there will always be problematic or challenging customers. You won’t be spared from the number of tenant issues that are sure to crop up. This includes late fees, storing banned items in the storage unit, theft, and more. If you are not ready to deal with these concerns, then running a self storage facility might not be for you.
Reading through the various pros and cons of owning a self storage facility in Ontario is the first step in deciding if this business venture is right for you. And while a self storage business has great potential for large profits, you should still consider all the risks and rewards before making your final decision.