# storage units



## donald (Apr 18, 2011)

Today i leased a unit in a storage compound,got me thinking that maybe this would be the way to go instead of wanting to become a landloard in the future.I dont know anything about the business but from the outside looking in it would seem superior than being a landloard of many units,zero human element.(i guess some but i assume nowhere near residential landloarding)


Im on a mth to mth lease,15x10,controlled heat,overhead door,big industrial double doors to wide hallways,200 a mth,mth to mth lease.Anyways the facility is maxed out(i was lucky to get one)various sizes and prices,600 units in the whole yard,there growing in popularity,wonder what kinda roi this business model would have,Or a cap rate,i assume your capital costs would be large up front,or for that matter if this is a francise business now,Anybody know anything about this sector of real estate?Personal storage is booming it seems.


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## OptsyEagle (Nov 29, 2009)

I think this graph will tell the story ... and don't forget that they have been paying big dividends to their shareholders for many, many years.

http://ca.finance.yahoo.com/q/bc?s=PSA&t=my

I guess people just like stuff and it all needs to be stored somewhere.


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## brad (May 22, 2009)

I rented a personal storage unit for a while when we were in a small apartment; the company that owned it also had a moving business, which I thought was a really smart idea. They offered both services to their customers and of course storage lockers could be used temporarily during moves, and we ended up using their moving service when we moved to our house -- they took everything out of our locker and moved that for us as well.


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## the-royal-mail (Dec 11, 2009)

These places frequently have to hold on-site auctions for the contents of lockers when people don't pay their bills.

People have too much junk. The solution is not to eat up more farmland with more storage lockers, but to purchase and consume less. Sell stuff you don't need and stop buying more stuff.

Only in cities do people park their $40,000 cars on the street just so they can fill up their garage with $1500 worth of junk. And now it's spreading to lockers.


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## andrewf (Mar 1, 2010)

I could deal with a storage locker in the basement of a condo I was living in, but having to go offsite would be a pretty big inconvenience. For $200 a month, you could probably get a place with another bedroom.


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## Cal (Jun 17, 2009)

The clinic I work for has to store charts for up to 10 years after the most recent treatment, love the gov't privacy of information policies, we have to use an off-site storage unit, much cheaper than getting 100 sq ft on site from the commercial LL.


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## brad (May 22, 2009)

the-royal-mail said:


> People have too much junk. The solution is not to eat up more farmland with more storage lockers, but to purchase and consume less. Sell stuff you don't need and stop buying more stuff.


That's one scenario. Consider these other scenarios, both of which are real-life scenarios (I know because they're the reasons I've rented storage lockers in the past):

1. A couple sells their house and moves to a new city, where they decide to rent for a few years to make sure they want to stay there before buying a home. They don't have room in their apartment for all their belongings, but they don't want to get rid of it because they know they plan to buy a house again in a few years and they'll need that stuff.

2. You have an apartment with a balcony, and you like to eat your meals on the balcony all summer long. In order to do that, you buy a small table and a couple of chairs. You also buy a grill so you can cook outdoors on your balcony. When winter comes you have no room in your apartment to put the table, chairs, or grill; if you leave them on the balcony you'll have to shovel around them, which is a headache (and you have to shovel off your balcony because your landlord requires it). 

There are lots of reasons why someone might want to rent a storage locker. Having too much stuff is only one of them.


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## crazyjackcsa (Aug 8, 2010)

I used a storage locker for a few years, I kept a car in it. 20X10 if I remember. 150 a month. I lived in an apartment, and didn't want the car in the lot. It was a 5 minute walk.


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## HaroldCrump (Jun 10, 2009)

It's also a good play if you are expecting a RE correction and increasing home sales.
People buy a lot of junk as they upgrade to bigger and bigger homes.
Much of that will end up in storage units in case of a RE sell off.
Also, if people have to move for work, that stuff will end up in storage units.


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## FrugalTrader (Oct 13, 2008)

I also really like the storage business model, strong passive income and no human tenants. Problem is, a lot of entrepreneurs like the biz model as well which is why they are popping up everywhere.


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## Mall Guy (Sep 14, 2011)

So a couple of things - "no human contact" until someone moves a mattress in and sets up house . . . or fills the unit with used tires/drums of toxic waste . . . if you like the business, buy a public storage REIT instead . . . oh and after a year at $200 a month, the $100 TV you store will have a cost base of $2,500 !


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## donald (Apr 18, 2011)

Ya,but there is no way someone could pull off living in?Atleast in the faculity i am in._no power,concrete floors and walls,lights in hallways but not inside units,cameras through out,front cleark during business hrs,people in and out.

Think of all the situations that need storage:Retail shops,restaurants,contractors,lawyers,accountants,sales reps,medical offices,manufacturers,government and educational instituations.Alot of the said above dont want to take up valuable office or retail space,im not taking about it from the angle of personal hoarding but thats also a incresing thing.

I personally am using one because i sold my old place and i am in limbo,and im a contractor(lots of tools and inventory)cheaper than looking for a commercial space(im not in that stage yet)

The front cleark was saying divorce is huge too(shotgun break-ups)I would never get a unit to store **** like old tvs and knick knacks,i agree thats looney.


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## Plugging Along (Jan 3, 2011)

Actually you can pull off living in one and it's not hard to do. The most difficult thing is the security portion that you mentioned. You would just need some generators, and off you go. Think about all the people that try to stowaway in shipping containers. 

I'm not saying that it happens often, but I do know it can happen.

I think the idea of running a storage company is not really real estate, it's just another type of business. It's not neccessarily passive income, because you do have to work at it to set up the company.


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## donald (Apr 18, 2011)

You cant! how would you vent a generator in a unit?Do you know how loud one is?.Id like to meet someone that could,you would have a better set up in san quientan than try that.

Its is both a business and a real estate venture,there just mixed together,you have tenents just not in the traditional sense.....your selling space via storage units.


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## Plugging Along (Jan 3, 2011)

There are actually reefer units (I don't know who the manufacturer is), but it can actually go on storage unit, and it can easily provide power to a storage container.

In the shipping industry, Intermodel containers often have them. I remember hearing of a case where a really wealthy person was trying to sneak into Canada, and they actually managed to use one of these reefer units onto a storage container, and managed to live quite comfortably for 4 or 5 weeks before they were found. He had a tv hooked up, lighting, a sofa bed, and food (no stove). 

These reefer units aren't that large, and could be hooked up if a person knew what they were doing.


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## donald (Apr 18, 2011)

I guess,but i dont see it,if a guy is that hodini(is that the spelling lol)than i guess,but....if your dodging cameras and setting up refer units...your good.With that skill set you probably could just swindle your way into someones home with munipulation and forgo being james bond.

I do think you could use one for a temporary bunker,im sure there have been all sorts of sheet that goes on,drug dealings,sex,ect.


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## Pigzfly (Dec 2, 2010)

These businesses can be found for sale; actually a lot + house construction sale I was privy to fell through when the couple decided to invest their funds into a storage rental business, of which they already had one.

I do know that my in-laws pay more per square foot of storage space somewhere in Toronto than retail space goes for in my town. They like to joke about it.

We will likely find ourselves using the services of two storage rental places in the next few months as we move. We will need to move the bulk of our possessions out in order to sell our place (it looks overfull compared to the majority in our building, plus it will be sold partially furnished so we need to remove any of our own things which might tempt buyers to ask for them); additionally, we will most likely end up living at the in-laws for an undetermined length of time upon arrival in a different city. (We are will to drive to the 'burbs for lower prices!) While there, our china, book collection, etc won't be useful, but won't be worth getting rid of!


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## sags (May 15, 2010)

A friend of mine made a move to the lake when he retired.

He had a big shop full of stuff, and it was going to take a couple of years to build a new shop and cottage on the lake property.

So, he purchased a couple of old freight trailers and filled them up.

He had them hauled up to the lake property and set there.

After he was finished building, he sold the trailers.

It ended up costing him nothing for years of storage.


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## sags (May 15, 2010)

I am wondering what liability insurance would be for a storage business.

I am thinking it would be quite high, given the exposure to law suits, especially if customers are there when nobody else is around.


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## Cal (Jun 17, 2009)

^ Wouldn't somebody have to be around to unlock the gates to the property itself....


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## Mall Guy (Sep 14, 2011)

Seriously, I know someone who owns several self storage facilities. The reason there are cameras and card locks is to prevent people from moving in, prostitution can also be a problem in urban areas, and dumping. He regularly checks the logs to track off hour and daily access (really, google "living in a storage locker", dozens of stories). 

Certainly not a carefree business, but then again neither is investing in commercial real estate. However it is one way to carry land for the future value in developing areas (this is really how car dealers make money . . . move to the edge of town until development catches up with them, sell to a developer and then do it again).


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