Buying a self storage facility in Toronto is a much harder operation than you imagine – especially if you want to make money on it. As with any person, each self storage facility has its own “genetic code” which predetermines its winning or losing properties. And such genetic code is very difficult to break.
There are so many people around who will assure that they know everything about how to buy a self storage facility in order to sell whatever they sell. But as a rule they have no real experience in this issue. The following concepts were collected by a Barrie Storage Company in the Ontario region based on real-life information from operating one of the biggest websites in the industry. And do not be surprised to read here something absolutely new.
Huge population within 2 miles of the facility
The idea, that you can get millions of people if build a self storage facility in the middle of nowhere, has already been broken. All self storages rely on people who need to store their stuff. For example, you want to attract people from Toronto but build your storage 50 km from it. Do you think it will work? The rule is simple: no population – no demand. You cannot buy or build your self storage facility in Barrie and expect to earn billions on it. Population density is a key to success in this business.
$30,000 average household income
Only if a customer has free ability to pay he or she will spend at least $100 per month for a storage. But in case they are struggling from already bad finance condition (they have to cover the rent or mortgage), be sure that they will not spend an extra cent on their self storage. Moreover, to have the actual need for any storage, they have to have any extra belongings. So you need to understand that only people with big incomes can have so much material to have a need in buying or renting a self storage facility.
400 employees and units and even more
In a self storage facility you will have some major fixed costs, and the largest is the manager. So you need to have enough units and staff to run your complex. Many people think that you can run a self storage facility from a small kiosk – well, this is not true. And for sure you will need professional managers. If you do not want to become one of those small rural complexes “for sale” do not make this mistake.
A healthy and reliable self storage market has a rental rate at around $1 per square meter (you can learn more about storage rental rates by browsing Storage Barrie Company’s website.) You can check the future profitability of this place by seeing the price. When you find rates that are significantly under $1, you are able to understand that it is not just out of whack, but also that you get no possibility in future to generate sufficient returns and make your facility a winner.
As you can see from the above hints there are some strict guidelines and rules to organize a successful self storage facility. As soon as you learn and understand (!) them, you are already appear to be a mile ahead in the competition. And that, if combined with the current commercial real estate meltdown, will provide you with one of the highest yielding self storage investments of all time.