Category Archives: Self-Storage

New Concept: Self-Storage Mobility Center

 Issue 93 – Future of Mobility?

Introduction…U-Haul International is building in Tallahassee, FL its first “mobility center.”  This will be a U-Haul facility that is unprecedented. Unlike anything, it has ever developed.

So, what is it?  The mobility center will include:

  • Self-storage space
  • Truck-sharing and rental services
  • Car-sharing and rental services
  • Charging stations for electric vehicles
  • A research and innovation incubator
  • Bicycle sales and repair services
  • Stations for alternative fuels
  • A “smart mobility center”
  •  It will be an “innovative mix of transportation and business services

Where’s the profit?  Looks like to this author that the services that will be profitable are the same services U-Haul provides now.  Self-storage and truck rentals.

In summary…The self-storage industry is growing in two opposite directions.  First, this amalgamation of services as U-Hual is developing.  The second is a total unmanned kiosk run storage facility discussed in a previous issue here.   Which will be successful will depend largely on the market location.

After an extensive commercial real estate career, I settled on self-storage investing for two reasons. It’s the best passive – residual income in the market today.

Forget New Year’s Resolutions!

 

Introduction…Every year Americans fail to keep their New Year’s Resolutions.

But, somehow we think if we just try harder, this year will be different.

There are scientific and spiritual reasons why we should “Forget New Year’s Resolutions and Instead Prepare Our Minds For Success.”

Click here to watch this powerful 5-minute video.

Click to get 9 Little Known Secrets For Steady Real Estate Income…Free

Happy New Year to you and your family!

Bill Moist, Self-storage buyer and developer

bill@billmoist.net

Click here to see this powerful 5-minute video

Creating Community And Connections With Self-Storage

 Issue 87 – Creating Community

Introduction...Self-storage facility may not be the first place you would expect to create community and connections, but great managers and owners are doing just that.

Community created...I visited one facility that was for sale west of Fort Worth.  It was an older property in need of some repair.  And yet the owner created community and connections which resulted in higher occupancy and rental rates than the Class A property a few hundred yards away.

Many self-storage facilities in hurricane-ravaged areas are extending help to their community.  Expect to hear stories of help and goodwill during the lengthy clean-up and rebuilding process.

Creating community and connections...Here is the short list of ways we can create community and connections with our self-storage staff and managers:

  1. Support and raise funds for local charities
  2. Creating connections with local business partners, chambers of commerce, and service organizations through volunteering
  3. Creating connections through marketing relevant and engaging communications
  4. Creating connections through social media inviting local content
  5. Practicing the Golden Rule as Rotary so eloquently reminds business leaders each week

Conclusion...Any business can be used for good or evil purposes.  It’s up to owners and managers to set the best direction that impacts the local community in the most positive direction.  Yes, even self-storage facilities are “Creating Community And Connections.”

Creating Wealth Through Self-Storage

Issue 86 – Why Use Self-Storage To Create Wealth

Introduction...The self-storage industry has experienced amazing growth.  Currently, 1 in 11 families, up from 1 of 8 families in 1990, use self-storage.  That means the number of families using self-storage has increased by 2,200,000 in a ten-year time frame.

Current owners…Property owners with just one property make up 63% of the total. These mom an pop’s normally rarely if ever raise rents and rarely make capital improvements that would allow further rent increases. This gives subsequent professional owners room for significant value add…or total revenue increase.

Owners with 10 or more facilities make up only 12% of the market. The rest, 25%, own 2 to 9 facilities.

The real estate investment trusts normally do not buy properties that are less than 50,000 square feet.  If we can add some additional space to get the mom and pop’s over 50,000 square feet, we may be able to sell to the REITs who generally buy at the lowest cap rates (highest purchase price.)

Who are the customers?…Generally, 80% of our customers are residential an 20% are commercial.  As a rule, 75% of our renters are within 3 miles radius of the property and another 15% drive from 3 to 5 miles to the property.

Conclusion…Self-storage is a growth industry.  Not only are the number of U.S. households increasing, but the percentage of households using storage is increasing.  And for the local buyers, like us, there is significant opportunity to raise rental income when we purchase properties owned by mom and pop’s

Source:  Review of Creating Wealth Through Self-Storage by Mark Helm.

Why Self-Storage Investors Are The Happiest

 Highlights From Annual TSSA Conference

Introduction…The 2017 Annual Texas Self-Storage Conference was an amazing event.  The content shared was first class and meeting the participants was a real joy.

Click here to watch the rest of the story.

 

Why We Love Self-Storage More Then McDonald’s

 Issue 79 – Storage is better than Big-Macs

Introduction…Turns out the only thing Americans may love more than Big Macs is hoarding.

There are more self-storage facilities in America than there are McDonald’s restaurants, according to a recent report from the commercial real estate publication REJournals. The U.S. has more than 4 times the number of self-storage facilities than McDonald’s. There are 58,000 self-storage facilities in America compared to only 14,146 McDonald’s restaurants at the end of 2016.

Finding a place for extra scrapbooks, holiday decorations, office records, boats and RVs isn’t exactly cheap either. The average American household is using about 18 square feet of storage at an average rental rate of $1.42 per square foot per month.

The industry makes more than $24 billion in revenue annually. Plus, state and property taxes get to scoop up about $3.25 billion.

Here are 4 reasons Why We Love Self-Storage More Than McDonald’s:

  1. We are a hyper-consumer nation consuming more than $14 billion in goods and services, much of which ends up in storage

  2. The psychology of self-storage is we have month to month leases with no end date so the renter thinks he will move out next month that never comes

  3. We are a nation on the move with 12% of the population moving each year

  4. When the economy is improving, we buy more stuff – when the economy is downsizing we store more stuff

Conclusion: So why are we building more storage facilities?  The population and the economy are growing.  But, more importantly, the trade area for storage is only 3-mile circle.  Take 18 square foot per household in an area and you can see the demand is great and growing.  And we have more room to grow as only 10% of the American households have discovered the joy of self-storage.

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How To Use Target Marketing

 Issue 72 – Let’s Find Our Target Market

Introduction…I’ve heard business owners say, “everyone will want my new product or service.”  Everyone is not a target market.  Everyone is like carpet bombing.  If you have the budget of Coca Cola, it might work. Otherwise we can be much more effective with a target.

Who is your target market?  Here are several questions to ask yourself:

  • Who is financially able to purchase my product or service
  • Who has a burning desire to purchase my product or service
  • Who can I attract affordably
  • Who do I want to do business with (not all customers are good fits)
  • What are the other interests of my target
  • Where can I find my target
  • How can I find my target within my budget
  • When is the best time to reach my target

What’s your target market area?

  1. Local
  2. Regional
  3. Statewide
  4. Nation
  5. International

We all have a tendency to want to cover a larger area, thinking that we now have more prospects.  Maybe.  But, if we can’t reach them it’s not very useful.  One company I worked with got stars in their eyes and went international way before they coud support it.  That decision hurt the company.

One of the most successful roofing companies in the Dallas area focuses on just two cities.  There are 34 cities in the DFW area.  But in the first 7 months of 2017, this roofing company did over 650 roofs by targeting  two cities.  They earned an estimated $5 million gross profit.  But, they dominated those cities and were everywhere.  This company became the company to call.

Next week…We will discuss this topic “How To Use Targeting Marketing” in our next newsletter.  We will discuss two examples of finding our target market and what comes next.

In Conclusion...Target marketing is much more effective and affordable than carpet bombing marketing.  Unless you have the budge of Coca Cola, we do much better knowing who are target is and how to attract them to business.

Shipping Container Self-Storage

 Issue 71 – Shippping Container New Self-Storage

IntductionYou have probably heard that sea going shipping containers are being used to build houses.  And now apartments.  And now self-storage.

Beautiful shipping containers…The above architects’ rendering is to be a new 1,017 unit CubeSmart Self-Storage in Pearland, Texas.  The property will be 95,565 rental square feet on three stories.  It will also included 24-hour surveillance, electronic access control, climate control, and as customer service office.

Why shipping containers?…One estimate says the U.S. has over 30 million unused shipping containers sitting on the ground waiting for a second life.

The compelling benefits to the developer and owner are:

  • Construction costs reduced by up to 50%
  • Construction time reduced by six months
  • Occupancy to positive cash flow reduced by 45%
  • Sea going shipping containers are almost indestructible
  • You don’t have to worry about hail damage in Texas

From the investor/owner’s point of view…we get positive cash flow faster at a 50% reduced cost.  ROI can be greatly enhanced.

What you can do to participate in this better building model

If you own or have access to a tract of land that generally meets the following criteria, let’s talk now:

  1. 5,000 cars per day passing site
  2. $50,000 median household income
  3. Rental rates in the area around $1 psf
  4. Suitable zoning
  5. Viability from road or highway

In summary…Let’s build some highly profitable and beautiful container self-storage properties.  Send your inquiry to bill@billmoist.net.

New Source of Self-Storage Financing: Credit Unions

Issue 65- Boat RV Storage

Introduction… It seems were ever we go we find self-storage properties in large cities or small towns.   Self-storage units also represent an untapped lending niche for credit unions looking to expand their business lending portfolios. And credit units represent a new source of self-storage lending.

Why should any lender, including Credit Unions, consider self-storage.  Here is few stastics that tell us why we’d want to own or why a lender would want to lend:

  • The self-storage industry represents $37 billion in annual revenue
  • $16.1 billion in profit or a 43% profit margin
  • Self-storage businesses grew at a rate of 7.7% from 2012-2017
  • 3.6% future growth is projected in the near-term (2017-2022)
  • There are total of 58,000+ self-storage businesses in the country (roughly 85% of operators are mom-and-pop local operations as opposed to larger corporate or franchised outfits)

In addition, self-storage presents the following benefits to lenders and owners:

  1. Low fixed and variable costs
  2. Low break-even occupancy, generally around 50% with an average occupancy at 85%
  3. Among the lowest default rates of any type of real estate
  4. Not susceptible to economic down turns

In conclusion...The relative safety of owning or lending purchase money are why some lenders will make loans with 25-year terms as apposed to balloon notes as is generally available for commercial lending.

Free Stuff Makes Self-Storage More Profitable

Self-Storage Insider Issue No. 63

Introduction…Who doesn’t love free resources that will make your self-storage operation purr like a kitten and kick out gobs of cash? —that is, a no-brainer!

Here is a list of free marketing resources of which self-storage can take advantage:

  • Free Facebook marketing posting company advertisement to groups where people may need storage.  Examples include… Garage sales listings, antique sales listing, flea market listings, and dealers of household items
  • Email marketing to current and prospective tenants with Mail Chimp which is free
  • Ask for referrals from existing customer…one property had a drawing each month with a prize for those who made referrals
  • Sponsor a charity event one property held garage sales with those who participating making a charitable donation and promoted through local chamber of commerce and actually picked up additional tenants
  • Optimize website for local search improvement with long-tail keywords
  • insert promotions in monthly billing statements at little cost
  • Monthly print newsletter this one is not free, but can worth the investment
  • Add phone number and website on property sign or side of building

In conclusion...The best marketing strategy uses multiple strategies.  My experience after reviewing dozens of self-storage properties is most use one maybe two marketing approaches. One large property that had 500 vacancies was using only one strategy.  I love my competition.  It is soon easy to out produce them.