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Creating Passive Income With Self Storage Facilities
By: Michael Press
People who are relocating or simply don't have enough room in their house need a place to put stuff. This is where self storage facilities come in. A person who needs his or her belongings stored in a secure place will rent out a storage unit in a self storage facility for a monthly fee. That person is able to use his or her own lock to lock the storage unit, and is free to put items in the unit or take items out during business hours. Self storage facilities require few, if any employees, and the only inventory that needs to be tracked is space. Also, if a person does not pay the rent for his or her unit, you are entitled to sell his or her belongings.
How they produce passive income: Depending on the size of the storage unit needed in the self storage facility, the monthly rents for each rental unit fall between $50.00 for small 5'x5' units, to $275.00 for 10'x30' units. Expenses for self storage facilities are extremely low. Most self storage units have only one employee, and pay about $600.00 a month for all utilities.
How to create this asset: Creating a self storage facility is no easy task. It involves a lot of research and a lot of work. It all pays off though after the self storage facility is created, because they are very easy to manage. The first step in creating a self storage facility in your area is to research the market.
You must find out if there is a need for a self storage facility in your area. If not, where is there a need that you can fulfill? Also, you must research prospective places in which you can build a self storage facility, and if you'll have to compete with other self storage facilities. Call self storage facilities in the area where you plan to place one and see what they charge for units. This will give you a good idea of current rental prices per unit, so you can decide how much you can charge per unit.
After doing your market research, you'll have to write a business plan. A business plan is required if you wish to seek financing from the bank. An internet link to a sample business plan of a self storage facility is located in the "For more information" part of this section. A bank needs to see that you have thoroughly researched your self storage business, and you know how to make it profitable.
After securing financing and purchasing the land you'll need, it is time to get the self storage unit's built. There are many different companies out there that build pre-engineered self storage units. Look in a phone book for companies that build steel buildings. Some storage unit builders are listed in the "For more information" part of this section.
Hire a lawyer to write up different contracts for your self storage facility. Each person that rents a unit should be required to sign the contract. This is to protect you from any lawsuits, and it also would give you the right to sell the persons belongings if he or she does not pay the rent for his or her unit. The information of the customers should be kept in a database on a computer, such as Microsoft access. Some software companies have designed software specifically for the use of self storage facilities. A few of those companies are listed in the "For more information" part of this section.
If you don't have the time to manage your self storage facility, then hire a couple of managers. The managers would work during business hours (typically 9:00 a.m. to 5:00 p.m.). They assist customers in renting a unit, entering the customer's information into the database, bill the customers that need to be billed, and also sell the belongings of the delinquent renters.
For more information:
How they produce passive income: Depending on the size of the storage unit needed in the self storage facility, the monthly rents for each rental unit fall between $50.00 for small 5'x5' units, to $275.00 for 10'x30' units. Expenses for self storage facilities are extremely low. Most self storage units have only one employee, and pay about $600.00 a month for all utilities.
How to create this asset: Creating a self storage facility is no easy task. It involves a lot of research and a lot of work. It all pays off though after the self storage facility is created, because they are very easy to manage. The first step in creating a self storage facility in your area is to research the market.
You must find out if there is a need for a self storage facility in your area. If not, where is there a need that you can fulfill? Also, you must research prospective places in which you can build a self storage facility, and if you'll have to compete with other self storage facilities. Call self storage facilities in the area where you plan to place one and see what they charge for units. This will give you a good idea of current rental prices per unit, so you can decide how much you can charge per unit.
After doing your market research, you'll have to write a business plan. A business plan is required if you wish to seek financing from the bank. An internet link to a sample business plan of a self storage facility is located in the "For more information" part of this section. A bank needs to see that you have thoroughly researched your self storage business, and you know how to make it profitable.
After securing financing and purchasing the land you'll need, it is time to get the self storage unit's built. There are many different companies out there that build pre-engineered self storage units. Look in a phone book for companies that build steel buildings. Some storage unit builders are listed in the "For more information" part of this section.
Hire a lawyer to write up different contracts for your self storage facility. Each person that rents a unit should be required to sign the contract. This is to protect you from any lawsuits, and it also would give you the right to sell the persons belongings if he or she does not pay the rent for his or her unit. The information of the customers should be kept in a database on a computer, such as Microsoft access. Some software companies have designed software specifically for the use of self storage facilities. A few of those companies are listed in the "For more information" part of this section.
If you don't have the time to manage your self storage facility, then hire a couple of managers. The managers would work during business hours (typically 9:00 a.m. to 5:00 p.m.). They assist customers in renting a unit, entering the customer's information into the database, bill the customers that need to be billed, and also sell the belongings of the delinquent renters.
For more information:
- http://www.selfstorage.org - Website of the self storage facility owners association.
- http://www.trachte.com - Manufactures pre-engineered steel self storage units for self storage facilities. Also assists entrepreneurs in the creation of a self storage facility.
- http://www.publicstorage.com - Offers a self storage facility franchise that you can build.
- http://www.tredd.com/ - Sells software specifically designed for use by self storage facilities.
- http://www.sampleplans.com/spv/3303/ - An example business plan of a self storage facility.