How to Start Your Own Shipping Container Self-Storage Business
What you’ll learn: This blog provides all the necessary information you’ll need to know if you’re considering investing in a self-storage business using shipping containers, instead of conventional structures. You’ll learn the benefits of using shipping containers for this business, how much you can make, prepping your shipping container, financing options, and how to get started.
Americans love to accumulate stuff - vehicles, furniture, decorations, clothing, childhood keepsakes, kids' clothes/toys, and more. Chances are your basement, attic, garage – or all three – are packed with things you’ve collected over time. There never seems to be enough space to store everything, no matter how much storage area you think you have.
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So where do people put all the things they want to keep but don’t have room for? A solution that’s become more and more popular in the last 10 years is renting a storage unit.
Why the self-storage business?
If you’re a business-minded person, this should pique your interest. The self-storage business, according to the online publication sparefoot.com, is massive. Check out these stats:
- For every person in the United States, there is 5.4 square feet of rental storage space
- The annual self-storage industry revenue in 2019 was $38.6 billion, an increase of 2.6 percent from 2014
- 1 in every 10 U.S. resident rents storage space – that’s 85 million Americans renting storage space
- USA Today says 14 percent of all Americans move each year. Many movers rent extra space to store the overflow. Market Watch expects the self-storage market to enjoy a 5 percent per year growth rate through at least 2023
- Many renters procrastinate about clearing out the stored items. On average, renters keep their units for over three years
People are paying money for extra storage space. What if some of that money went to you? If you owned a self-storage business, it could happen. But instead of buying or building a typical storage facility, think outside the box for a minute.
There’s a simple, low-cost way to start your own self-storage facility wherever you want and without expensive construction costs: Using shipping containers. Building a shipping container self-storage facility allows you to start your own business and make a profit very quickly. It alleviates the costs and limited flexibility that comes with investing in and renting out other types of properties.
Why shipping containers?
This might sound unorthodox, but there are many reasons that shipping containers are perfect for storage facilities, such as:
- The cost to build a traditional storage facility is much higher than using shipping containers
- Shipping containers are strong, secure, waterproof, and have strong, thick steel walls
- Unlike traditional facilities, shipping containers are dustproof with tight seals around the doors to keep animals and rodents out
- Shipping containers are secure, with both a lock on the door handle and a special lockbox for additional security
- Shipping container doors fully open, making it easy to store very large items – even full-size cars and trailers
- Shipping containers retain their value much longer than a building and require little to no maintenance
- As demand dictates, using shipping containers for your business allows you to relocate, add, remove, and rearrange units, giving you much more flexibility
How much money can I make?
Okay, but show me the money. Like with all kinds of business ventures, success depends on your investment and commitment. Here are three potential scenarios:
Scenario 1
- Shipping Container Costs: $3,000 x 50 = $150,000
- Land/Prep Costs: $200,000
- Total Costs = $350,000
Renting out each unit for $150 a month: 50 x $150 = $7,500 a month. This equates to $90,000 return per year and would pay for itself in about 4 years.
Scenario 2
- Shipping Container Costs: $3,000 x 100 = $300,000
- Land/Prep Costs: $350,000
- Total Costs = $650,000
Renting out each unit for $150 a month: 100 x $150 = $15,000 a month. This equates to $180,000 return per year and would pay for itself in a little less than 4 years
Scenario 3
- Shipping Container Costs: $3,000 x 250 = $750,000
- Land/Prep Costs: $650,000
- Total Costs = $1,400,000
Renting out each unit for $100 a month: 250 x $150 = $37,500 a month. This equates to $450,000 return per year and would pay for itself in about 3 years
Scenario 4
- Shipping Container Costs: $3,000 x 50 = $150,000
- Land/Prep Costs: $200,000
- Total Costs = $350,000
Add two roll up doors on each end of the shipping container and a dividing wall, and rent out each section within the shipping containers for $150 a month: $150 x 2 = $300, 50 x $300 = $15,000 a month. This equates to $180,000 return per year, and would pay for itself in a little less than 4 years.
You can also add two roll up doors on each end, and two dividing walls, renting out 4 sections within one unit for $75 a month: $75 x 4 = $300, which also equates to $180,000 return per year, and would pay for itself in a little less than 4 years.
Keep in mind that you don’t even have to operate your facility at full capacity to make money. Typically, a self-storage facility still makes a profit at 60 percent to 70 percent of maximum occupancy. Currently, the average industry occupancy stands near 90 percent, according to Statista. Nevertheless, experts say it takes one to two years to reach 90 percent capacity.
Also, the self-storage business is practically recession-proof. Families looking for extra space or a place to store their stuff during a moving process aren’t the only ones renting. So are young adults returning home after college, job loss or divorce, downsizing Baby Boomers, military personnel, and families of elderly who are moving into assisted living facilities.
So that’s the “why” behind why shipping containers make for the ideal storage facility. Let’s look at the “how” – as in how to make this business idea a reality. Taking the business from an idea to a done deal includes thinking about location, permits, preparing the business site, purchasing the containers, and financing. We’ll take a brief look at all these factors.
Location
Accessibility and demand are important when choosing a location for your facility. Look for space near a local college, near senior care facilities, major corporations, industrial parks, or military facilities. Try to identify a central location within driving distance of some populous cities in your area or space accessible via a major roadway.
Permits
After identifying a location that will fit your needs, learn more about the local zoning ordinances. This will ensure that you comply with all local zoning codes and regulations. If possible, visit the town hall or city hall to request this information. You may also be able to find this information by visiting the local zoning's website. Do a bit of research and contact the zoning board if you are unsure or have any questions.
Prepping the Area
Shipping containers need to be placed on flat land. The site where the storage facility is being built will need to be cleared and leveled. A storage facility's typical aspects should be present to assure the customers that their stored items are safe and secure. This includes:
- A security system
- A security fence
- Shipping container lockboxes
Buying Shipping Containers
Now that the site is both prepped and cleared by the zoning board, it is time to purchase the shipping containers. The best option is to purchase new, or one trip, shipping containers. These have only held cargo one time and will require less maintenance in the future. The other option is to use used wind-water tight (WWT) units. These units may need some initial maintenance and paint before they are ready to be used in the facility.
Using shipping containers instead of traditional storage units is much more cost-effective and easier to manage. More shipping containers can easily be added as demand increases. You can find more information on buying shipping containers on our Buying Guide.
Prepping Your Shipping Containers
Once you have your shipping containers, you’ll want them to look as attractive as possible. Painting them will make that happen. Not only will they look nicer, but the paint will extend the life span of the shipping containers by protecting them from harsh weather and slowing the corrosion process. It’s important to correctly prepare the shipping container’s surface before you even consider putting a drop of paint on it. Just as you would do if you were painting a wall in your home or a damaged section of a vehicle, surface preparation is critical.
The other most important factor in painting your shipping container is the paint you select. The steel surface needs to be painted with an acrylic-based, specialized paint. The paint should be chemical and corrosion-resistant. Learn more about paint selection here.
Shipping container accessories are also something you'll want to consider buying to ensure protection and security. For a shipping container storage business, roll-up doors, lockboxes, and vents are among the necessary accessories you should plan for. You can learn more about these accessories and browse our offering here.
Financing
The initial investment in your facility will vary depending on a few factors:
- Land and zoning costs
- Cost of improvements to the facility
- The number of shipping containers purchased
- The condition of the shipping containers purchased
One of the highest costs will be shipping containers in general. Fortunately, quite a few shipping container providers allow commercial businesses to finance their shipping containers. You can find more information on financing your purchase on our Financing Options page.
Shipping containers are the ideal solution to your self-storage needs, saving you money, and providing you a safe and secure space. You can find shipping containers near you available for purchase here. We wish you luck with your business venture!
Sources
https://www.rhinobldg.com/3-reasons-to-start-a-self-storage-business/
https://www.sparefoot.com/self-storage/news/1432-self-storage-industry-statistics/
https://shipped.com/blog/shipping-container-storage-facility-best-investment-real-estate/