Looking to earn some passive income by renting out storage space? Join us as Hope explains whether storage units are profitable and what to watch out for before you go for it.
Hi there, welcome back to Flex TV. My name is Hope and I will be answering all of your storage related questions. So today we have a question from Mark who wants to know, are storage units profitable? It’s just like every other business question, it’s quite complicated and I wanna stress that I am not a financial professional, but I will do my best to touch on some points that might help you make a better informed decision. So the reason why self storage is considered to be a good investment by so many people is because it has some really strong advantages. Number one, demand is always, always high. We are always accumulating more stuff and we definitely need a place to keep it. Another great advantage is the low operating costs of this business. If you’re going to buy or construct a self storage facility, all you really need is the building and some security measures. You’re not going to need other really expensive equipment unless you’re doing a portable storage business and that costs a little more on the operating side. When it comes to disadvantages, you should think about the capital expenses, which means if you’re going to construct a warehouse or even buy a pre-made facility, it can cost you a pretty buck depending on how big you want it to be and how many units you want. Now, eventually you’re gonna turn a profit, occupancy rates are crazy high in this business, but you really wanna take into account what you’re spending, what you’re gonna get back and how long that’s gonna take. One of the big advantages though is a really strong cashflow. You collect monthly rent so you always have cash coming in, which is great for running a business and covering your expenses. Another disadvantage to pay attention to is that it is a very seasonal kind of business. So that means you will usually be getting more income during the summer and a lot less during the winter. So keep that in mind. In conclusion, Mark, if you wanna start this business just like any other business, you need some professionals around you to help you out, do your proper research and due diligence and find out exactly what you need to turn a profit. I hope I answered your question.