Saw a post today about a girl being a “pet psychic” who is apparently super successful. Wondered what other examples are out there.
Saw a post today about a girl being a “pet psychic” who is apparently super successful. Wondered what other examples are out there.
I’m constantly amazed at the quantity and size of storage unit businesses that people are willing to pay hundreds of dollars per month for to store their crap… Just mind boggling.
Those places print money, as long as they own the land. The numbers are great and the overhead is almost zero.
Not anymore
Can you, elaborate? I know 2 guys who own storage facilities and they can’t spend the money fast enough. They only need to rent about 10 units (out of 100-200 units on site) to cover the cost of labor to have people working there, the insurance is low (because insurance doesn’t cover anything and the buildings are metal and cinder blocks), maintenance is low (again, cuz metal buildings) so every remaining unit rented is money straight into their pockets. As long as some other dumbass doesn’t build one across the street then they’re set for life.
Guy I work with had 8 units at one point. I said dude you are insane. Over 10 years you spent $100,000 to store $10,000 worth of shit.
Sure. They are overpriced.
You used to be able to buy these at 10 caps (10% per year return), and then increase their profitability to 20%+ or even 50%+ if it was in bad shape. Along the way, debt prices went lower and the asset values grew so refinancing or selling for a huge gain was pretty common. These are typically the stories you hear. Gurus get clients by convincing people this is still possible.
Today, everybody is aware of this asset class, so the entry price might be a 2 or 3 cap, and you’ll do a lot of work to get it up to a 6 or 7 cap in a great scenario. Don’t believe me? Ask a broker for some pricing and this is what you’ll see. Those aren’t the exciting returns of years past. Most people buying today at these super high prices are institutionalized. They capture value by putting 100 units into a bucket of 10,000 units that they can sell off to PE shops at a premium (these typically have a $10M min). They can buy for a 1 cap and still make a ton with this model, although if they don’t know how to operate they have their own troubles.
Btw, this same concept has played out in multifamily, mobile home parks, self storage, HVAC companies (not totally yet with these), car washes, etc…. There are a variety of factors that go into it, but if you had to boil it down to a single affect, it’s essentially just price discovery.
I personally believe that this is the most important piece in analyzing businesses. Just because a business is extremely stable, doesn’t mean that it can’t be extremely risky if you overpay. Stability + spread over costs are what makes businesses stable.
A family friend got in early. He was always very blue collar but he hand built a bunch of storage units decades ago and is now a multi millionaire from them
Do the numbers. I’ve been trying like heck for months to build a storage lot for boats and rvs. Right spot they print money with minimal work.
Storage can be awesome as well if you desire to have more toys without locking into purchasing a much larger property. Storage space is flexible space so if the boat is no longer interesting, can sell the boat, cancel storage and not have any ongoing expenses.
We have 2 year round spaces 12x30 and an additional seasonal indoor spot for a 39’ RV. All in it costs about $2500 a year. Not ‘cheap’ but worth it for this situation.
The seasonal spot is a large pole shed and the guy gets 110-120 units in there at an average of $400 each. good cash flow if you have the space.
I live in a condo in the middle of Los Angeles and work in construction. I pay $225/mo for a 5’x10’ to store all my tools. So annoying. At least it’s tax deductible.
Dont forget that once you start and end your day at the storage shed, all your vehicle mileage in between is deductible. Keep good records.
Selling everything and telling my corporate storage place that increased rent 300% over 2 years to get bent was the best feeling in life
You’re an outlier. That’s still expensive af but your tools make you money. Wouldn’t consider that “storing crap.” But damn that’s overpriced for where I am, by a huge amount.
About the same around here (ontario canada, a hour from toronto)
Any they’re going up everywhere. A good chunk of a mall that’s been here for decades was just converted to one from a Target that failed.
Hey, I just saw “The Killer” on Netflix… I bet you “paint” lots of “houses”. Stay cool!
Its so insane. My bil rents on for like 350 a month to store his xmas decorations. He could literally just buy 3600 dollars of new stuff each year
Thought about this recently. They are popping up exponentially in brisbane Aus. I think people that are working but cant get approved are essentially forced to store their stuff and live out of their car. Worked with multiple people who were days from being homeless, its just hard to find a place with 50 plus applicants on each. One guy got a place by paying 2 years of rent up front. Its insane, most of the homless still work a full time job.
Seen about 10 storage facilities go up in the last year. Likely alot more have and others have had huge upgrades.
That’s all that’s being built in my North Atlanta suburb. They’re building 3 of them at 1 intersection, and there’s a 4th 2/10ths of a mile away.
Middle class abundance & pack rats that can’t let go make storage lucrative.
Not just people, corporations need massive storage facilities.
I tried to buy one of these businesses during the early part of the pandemic. Would have been a slam dunk.
My dad did some consulting work for one of these back in the 90s. Said “I’m in the wrong business” and started investing in them. He’s done great.
I’m the third generation running my family business and have heard that at one point my grandfather seriously considered pivoting to self storage. This would have been the very early 80’s. Man, I really wish he would have. We are a society of consumers that has taken to hoarding with an economy that loves housing booms and busts. I keep thinking that it’s too late to get into it as there are storage facilities just everywhere, but idk, maybe not.
I used to think so too but now as an adult with lots of experience I absolutely understand why storage is so needed.
Well, there’s business storage too. Like I used to work field jobs. Offices don’t have room for field gear in the winter, my employers used to rent out really big storage units. Additionally you have seasonal sports programs and nonprofit organizations with annual events needing places to put things.
I do conventions in a city across the country once or twice a year. Shipping the display, chair, signage etc back & forth is super expensive. Lots of people just buy cheap tables & chairs & a rug at Ikea then give it away or throw it in the trash at the end. So wasteful!
I pooled together with a few other vendors to rent a storage locker for our booth display. It stays out there now.