Monthly Archives: July 2017

Self-Storage Boom Driven By ‘Four Ds’

Issue 70- Self-Storage Demand Driven By Four Ds

Introduction...Self-Storage is booming.  Seventy-five per cent of all self-storage in the world is in the United States.  There are over 50,000 storage facilities in the U.S. and the rest of the world has 15,000.

Demand…Demand for self-storage is driven by four major life events the industry calls “the four Ds”

  1. divorce
  2. death
  3. downsizing
  4. dislocation (e.g. job loss)

“The big driver is change,” said Brad Schwer of Morningstar Equity Research.  “In one way or another, people are looking for stability.”  That may be why they hang onto stuff that may not have a future value to them.

The U.S. has an estimated 2.6 billion square feet of storage, according to the Self-Storage Association.  That’s about 8.1 square feet per person, which is growing.

Experts are not sure how much longer this growth curve will last.  However, storage is very local.  Typically, our trade area is a 3-mile diameter.  So, one area that could be over built, may not impact another area where demand exceeds supply.

Click here to watch the rest of the video.

I recently visited a property in a town west of Fort Worth. This C Class property was charging higher rents than an A Class property one mile away.

I asked the owner how she could charge higher rents than a nicer A Class property.  She said, “I don’t worry about what my competition charges.  I just give the best personal service in town, so price is secondary.”

Why tenants stay...Most people rent storage much longer than they expect and over value the sentimental item inside.  Rarely do they shop for better pricing once their belongings have been stored.

The physiology of storage is opposite that of other commercial real estate.  Generally, we want longer term leases for commercial property of 3 to 5 years.  With storage, our leases are generally, month to month.  If they had a term lease, they would be inclined to move out at the end of the term.  With a month to month lease, they can move out at the end of the next month.  Then the next month.  Then the next month.  Five years later, they still haven’t moved.

In conclusion…Self-storage is a good business to be in.  The reason its a good business is that you can raise rents on existing customers by 5 to 10 per cent every eight to ten months and they will stay.  Most customers are on auto payment so the small incremental increases typically don’t spark a move out.

Online Auction Part 2

 Issue 69 – Online Auction Part 2

Introduction…In the last issue No. 68 of Self-Storage Insider, we discussed how Governor Greg Abbot signed Senate Bill 952 into law May 28, 2017.  Self-storage online auctions rules are now clarified. The Texas Self-Storage Association (TSSA) promoted this bill so that online auctions could be codified into Texas Property Statute so there is no question they are allowed.

Why this change is significant…For those who love collectibles and antiques, the TSSA has a listing of upcoming online auctions where  you can participate.  Here’s the link www.txssa.org/auctions. On this link are listed 366 storage units’ content that is up for auction.  The property managers are discovering they are getting a better price for items sold and it takes less time as a third-party auctioneer handles the sale.

Where are the storage units’ content being sold?… This us the cool part of the auction process.  From the comforts of your home, you could bid on storage units located in the following Texas cities:

  • Arlington       Houston     Garland    Frisco     Galveston   Dallas
  • New Braunfels    Carrollton    Fort Worth     Austin    Round Rock
  • Temple   Tyler    Waco   McKinney   Kilgore  San Antonio   Katy
  • El Pasco   Spring   Tomball   College Station   Copperas Cove
  • Mansfield   Lewisville  Bryan  McKinney   Little Elm  Georgetown
  • Kyle  La Feria  Harlingen  San Benito  Mission  Pharr  Edinburg
  • McAllen  Mission  Desoto  Temple  Texarkana  Prosper

In conclusion…One self-storage owner said he auctioned off the items in one storage unit that belonged to an older lady who passed.  The purchaser found four original Republic of Texas Notes that he sold for $2,400.  Who knows what treasures may lie in these auctioned storage units’ content.  But, at least now everyone has a chance to participate.

To “Get 9 Little Known Secrets For Steady Real Estate Income-FREE. click here.

Self-Storage Online Auction Bill Passes

 Issue 68- Online Auction Bill Passes

Introduction…Governor Greg Abbot signed Senate Bill 952 into law May 28, 2017.  Self-storage online auctions rules are now clarified. The Texas Self-Storage Association (TSSA) promoted this bill so that online auctions could be codified into Texas Property Statute so there is no question they are allowed.

What this means to self-storage owners…Many TSSA owners have already been using online auctions to sell abandoned property.  But, this legislation clarifies that online auction is a public auction that satisfies the statute.

Many TSSA members have reported that online auctions offers easier processes, and in many cases higher bids, as the pool of bidders expands.

Many of the same members told TSSA they’d rather spend time on normal business activity of renting and maintaining units and collecting rents than holding in-person auctions at the facility.

In summary…Most self-storage owners and managers will tell you they would much rather collect rent than auction tenants property.  However, the advantage of self-storage over any other kind of property rental, is if we don’t get paid, we can sell the units content to pay back rent and fees.

For those who love collectibles and antiques, the TSSA has a listing of upcoming online auctions where  you can participate.  Here’s the link www.txssa.org/auctions.

To “Get 9 Little Known Secrets For Steady Real Estate Income-FREE. click here.

Announcing Increased Cash Flow For Storage Investors

 Issue 67 – Increased Storage Cash Flow

Introduction…This is an exciting time to be a self-storage owner or investor.  We have multiple ways to decreasing operating costs and increasing positive user experience.

Here are current items that improve cash flow for owners or investors:

  • Online payment processing
  • Online unit availability and lease execution
  • Smartphone online leasing
  • Gate access with smartphone
  • Unmanned properties with Advanced Kiosk
  • Enhanced data track-ability and analytics
  • Paperless operations reduce management expenses and provide improved search ability
  • Improved customer experience by providing information access as they want it with websites, software, gate access, payment processing, and facility marketing.

In summary…Much of the above technology improvements to customer experience are so affordable.  The labor saving and speed to lease or collect payments greatly exceeds its cost.  This is an exciting time to be owners and investors in self storage properties.  To request more information, email bill@billmoist.net

What you didn’t know about the 4th of July

Issue 66th- Special July 4th Addition
Delivery day changed to Monday for the 4th
THE BIRTH OF AMERICAN INDEPENDENCE
When the initial battles in the Revolutionary War broke out in April 1775, few colonists desired complete independence from Great Britain, and those who did were considered radical. By the middle of the following year, however, many more colonists had come to favor independence, thanks to growing hostility against Britain and the spread of revolutionary sentiments such as those expressed in Thomas Paine’s bestselling pamphlet “Common Sense,” published in early 1776.

On June 7, when the Continental Congress met at the Pennsylvania State House (later Independence Hall) in Philadelphia, the Virginia delegate Richard Henry Lee introduced a motion calling for the colonies’ independence. Amid heated debate, Congress postponed the vote on Lee’s resolution, but appointed a five-man committee–including Thomas Jefferson of Virginia, John Adams of Massachusetts, Roger Sherman of Connecticut, Benjamin Franklin of Pennsylvania and Robert R. Livingston of New York–to draft a formal statement justifying the break with Great Britain.

Did You Know?
John Adams believed that July 2nd was the correct date on which to celebrate the birth of American independence, and would reportedly turn down invitations to appear at July 4th events in protest. Adams and Thomas Jefferson both died on July 4, 1826–the 50th anniversary of the adoption of the Declaration of Independence.

On July 2nd, the Continental Congress voted in favor of Lee’s resolution for independence in a near-unanimous vote (the New York delegation abstained, but later voted affirmatively). On that day, John Adams wrote to his wife Abigail that July 2 “will be celebrated, by succeeding Generations, as the great anniversary Festival” and that the celebration should include “Pomp and Parade…Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other.”

Conclusion…On July 4th, the Congress formally adopted the Declaration of Independence, which had been written largely by Jefferson. Though the vote for actual independence took place on July 2nd, from then on the 4th became the day that was celebrated as the birth of American independence.

Happy 4th of July!  Enjoy this time with your family.

Bill Moist
Source:  History Channel