Inside Self-Storage

SEP 2018

Inside Self-Storage (ISS) is an information source for industry owners, managers, developers and investors covering news, trends, facility operation, finance, real estate, construction, development, marketing, technology, insurance and legality.

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Most small-town storage businesses are independently owned and rarely have employees. In fact, it's common to run the operation from a separate, existing business—either one you own or another you pay to assist you with rentals. For example, gas stations, sandwich shops and liquor stores have all served as rental offices for storage businesses. Technology can help you add more flexible rental options. Online reservations and leases are supported by management software, which has become more affordable thanks to scaled pricing plans. Self-storage kiosks have increased in popularity as well. These machines can offer live chat support as a new tenant works through the process of choosing a unit, paying and signing an agreement. They can even dispense a lock. Normally, unoccupied units should be locked to keep the facility secure and ensure clean units remain so. For unmanned sites, tamper-evident tags can be used to deter entry and make it easy to spot any issues during a drive-through inspection. Ensuring Proft New self-storage owners/developers often ask how small of a site can they build and still make money. This is understandable, as most are stretched financially on their first project. Indeed, a small, unmanned, owner-operated site can be profitable. However, there are some expenses (and hassles) that aren't much different on a 50-unit facility than one with 200 units. You'll need to consider the level of revenue you need to make the project worthwhile. During site planning, think about your exit strategy. Larger urban and suburban sites are attractive to bigger buyers who can pay a premium. Their size helps them cover the overhead. In a rural area, you might not be able to build a single 100,000-square-foot facility, but it wouldn't be difficult to build three 50,000-square-foot sites over several years. That portfolio can eventually be very attractive to buyers. Smaller-market facilities are the easiest way to break into the self-storage business. The overall development cost is lower, you can retain your day job, and it can be done without bringing on employees. When it's time to scale up, additional locations or phases can be added. You'll eventually create a valuable group of properties that can provide significant income or command an impressive sales price. Steve Hajewski is the marketing manager at Trachte Building Systems, which designs, manufactures and erects a full line of pre-engineered and customized steel self-storage systems, including single- and multi-story, portable storage, interior partition and corridor, and canopy boat/RV. He also owns a self-storage facility in Wisconsin and is a frequent contributor on Self-Storage Talk, the industry's largest online community. For more information, call 800.356.5824; visit www.trachte.com. LEARN MORE Learn more in the video "Building Self-Storage in Small Secondary and Tertiary Markets," available in on-demand and DVD formats exclusively at iss-store.com. September 2018 I ISS 31

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