Building A Legacy With Your Real Estate Business
If you’re looking for one of the best opportunities to make passive income through real estate with as little hassle as possible, starting your own self-storage business is one of the best ways to go! There are so many benefits to working in the self-storage industry, one of the biggest benefits being the fact that it’s an extremely stable, recession-resistant industry. It also requires much less upkeep, management, and repairs than most other types of real estate.
The self-storage real estate industry is booming, generating more than $33 billion in revenue, and there’s never been a better time to hop on board. Wondering the best way to get started and start building your real estate legacy? Below, we’ll break down some key steps.
Establish your business and business plan
Just like any business, you’ll want to make a name for yourself and your self-storage business!
First thing’s first: a good name and logo that will ensure your business sticks in everyone’s mind. Choose something memorable and eye-catching that encapsulates your business. It’s also essential that your name and logo are original so that you don’t run into any trademark trouble.
Once that’s all settled, you can set up your website. This is vital to any business in our current day and age – your website is how most people will find you, so make sure it’s high quality and attracts the right customers.
You’ll want to consider your business entity, as well. Are you building a corporation? LLC? Something else? A lawyer will help you sort all of this out if need be.
You’ll also have to decide whether you want to own your self-storage business independently or with a franchise. While many choose to own independently, a franchise can offer greater guidance if you feel you want some help along the way.
Make sure you also have all of your insurance, licensing, permits, and contacts prepared, as well as a rental agreement for your customers, which a lawyer can help you draft.
Finally, a business plan will help you solidify your endeavor and get things rolling on the right track. You’ll want to make sure everything is in order to run smoothly, from your marketing plan and market analysis, your revenue and cost projections, and even some research on the competition.
Financing
While starting a self-storage business is a sure-fire way to bring in money, you can’t start one without some financing at first. If you’re not sitting on savings large enough to do it on your own, you may want to look into bank loans and SBA loans.
Just make sure you have good credit and enough to make a 15%-30% down payment.
There are tons of online tools available to help you find lenders if need be. Before long, though, the money you make from your business will be more than worth the initial expenses.
Choose a high-traffic, profitable self-storage location
Just like any other real estate, location is everything when it comes to self-storage facilities. The demand for self-storage is high nearly everywhere, but you’ll make the best profit in high-traffic areas with particular demographics.
At TyMac, we’re dedicated to finding the perfect locations on which to develop all of our storage facilities. To do this, we scope out the most visible, high-traffic areas with a high demand for self-storage units. Often, these are areas largely populated by two demographics:
- Millennials, who are delaying homeownership and renting for longer and longer – often remaining lifelong renters. This often leaves them with less space and a higher likelihood to relocate, ramping up their need for self-storage.
- Baby boomers, who have increasingly been downsizing both their homes and businesses. This means they’ll be in need of storage space to store their excess belongings and business assets.
Keep income in mind as well; you may find that the best option has a middle- or upper-middle-class population, as these demographics have disposable income.
Urban areas are also generally a good place for a self-storage facility, as small apartments and a high population of renters typically mean a high demand for self-storage.
If you have a particular location in which you’d like to start your self-storage business, check out the area and see if there’s a piece of land large enough to build a facility – the average size is 57,000 square feet.
It’s also always good to aim for a location with a lot of visibility from the road.
Keep your facility high-quality and up-to-date
To keep your customers satisfied and keep more coming, you’ll want to provide top-notch quality. That means keeping your facility clean and well-maintained (which will take only a little bit of work compared to other types of real estate), equipped with great security, and user-friendly.
Online booking and automated kiosks, for example, are great features that will help you and your customers; the self-serve model means less hassle for everyone involved.
Consider purchasing a self-storage business
You can cut a lot of the hassle out of starting a self-storage business by purchasing an already profitable, already existing one.
At TyMac, we take some of the stress out for our investors by scoping out the best locations and developing high-quality facilities. If you’re interested in starting your self-storage journey with us, contact us today to become a partner – it’s one of the best financial decisions you can make!
