Self-storage : profitable investment with little competition

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Self-storage and storage spaces : new paradise for property investors ?

When we think of property investment, we often think of renting a flat or a house, commercial premises or a car park. But there’s another type of property that’s increasingly in demand: the rental of storage space: cellar, garage, box or warehouse.

📈 This is a market that has been growing rapidly for several years and is doing very well (due to a catch-up effect: several European countries offer 2 to 3 times more storage space).

💰Yields of up to 10% per annum for a very passive investment (average rental period 24 months 😳).

What is self-storage ?

A self-storage centre is a facility where individuals and businesses can rent secure storage space for their belongings. Imagine a warehouse divided into compartments of different sizes, accessible 24 hours a day, 7 days a week.

Are you a property investor looking for a lucrative, stable and sustainable opportunity ?

Imagine an investment that offers you :

• Exceptional returns, higher than traditional rental property (over 10%).
• Automated management, without the hassle of residential lettings.
• A fast-expanding market, with strong growth potential in the years ahead.
• An exciting and replicable business, with customers who are both private individuals and professionals.

7 reasons why private individuals rent a storage unit

• Moving house, selling a flat or house without having the keys to your new home. You need to find a place to store your furniture and boxes.
• Parents are moving into a retirement home and unfortunately can’t afford to keep their house. They categorically refuse to have to get rid of their belongings, to which they are attached.
• To sell a house quickly and at the best price, you need to show it off to its best advantage. To do this, it’s essential to free up space so that the house looks bigger, by removing bulky furniture and knick-knacks lying around.
• The recurring lack of space that drives you to rent a storage unit. It’s always more profitable, and easier, to rent storage space than to buy or rent a larger home.
• Home swapping during the holidays to keep items that people hold dear in a safe place.
• A growing family, but the baby’s future bedroom looks more like a storage room.
• If you’re moving abroad and don’t want to have to get rid of all your belongings or be forced to keep a flat to store them, renting a storage space seems to be the most appropriate solution.

2 reasons why professionals choose to rent a cubicle

• Storing equipment and goods : professionals often run out of space to store various items, such as goods, and are looking for alternatives to meet their space requirements. A storage unit can be used not only to store equipment of all kinds (machinery, seasonal stocks, etc.), but also in optimum conditions to keep them sheltered and dry.
• Archiving administrative documents : To save space, many professionals opt for administrative archiving in furniture storage. These documents are very important from a legal point of view, so they are sure to be kept in a secure place.

Why invest in self-storage ?

The advantages of self storage

Let’s take the most common example, that of a commercial warehouse initially dedicated to professionals and then divided into several storage units. The advantages are numerous:

• High demand : Demand for storage is constantly increasing, due to factors such as frequent moves, the boom in e-commerce, urbanisation and the needs of businesses.
• Little competition : The self-storage market is still relatively undeveloped in France, which means there are plenty of opportunities for new investors.
• High yields : Self-storage centres can generate net yields of 10 to 25%, far higher than traditional rental property.
• Simple management : Thanks to modern technology, the management of a self-storage centre can be automated, saving you a lot of time and energy.
• Exciting work : You will have the opportunity to work with customers from all walks of life and help them solve their storage problems.

💡 Did you know : demand for storage has been rising steadily for the last 5 years.

Disadvantages and risks of setting up a self-storage centre

Any business that makes money has its drawbacks. In the case of a storage centre, you need to have an entrepreneurial streak to get started. In fact, there is a barrier to entry if you want to start up without risk. Not everyone can do it; you need support and the right contacts to succeed. The main risk is linked to a lack of experience, so launching a project of this scale alone is not for everyone, and carries a very high risk of losing capital. That’s why we’ve come up with a solution to help you succeed in your projects.

Self-storage : property investment and real business

As well as acquiring a property that will increase in value over time, you are creating a business activity that generates recurring income. Here are some of the advantages of considering self-storage as a business:

• Passive income : Storage unit rents are passive income, which means you don’t need to be on site to collect them.
• Scalable business : Demand for storage is constantly increasing, which means you have the potential to grow your business over time.
• Resilient business : Self-storage is a sector that is relatively unaffected by economic crises, because people still need to store their stuff.
• Flexible business : You can adapt your service offering to suit the needs of your customers and the local market.

Of course, as with any business, it’s important to be well prepared before launching into self-storage. In particular, you need to carry out thorough market research, choose a strategic location, set up an efficient management system and offer excellent customer service. But if you’re up for the challenge, self-storage can be a very rewarding property investment and business.

Yields obtained with a storage centre

Some members of the club have agreed to share with you the figures for their operations to create a self-storage centre. It’s a good investment strategy to acquire and operate a commercial shed or warehouse to offer furniture storage.

Property type	Acquisition price	No. of boxes created	Center income	Expenses	Gross yield*	Sale price	Added value	Member name
Commercial space	€ 80,000	30	€ 1,900 per month	€ 700 per months	28,50 %			Contact this member
Warehouse	€ 212,000	70	N/C	N/C	20 %			Contact this member
Warehouse	€ 70,000	20	€ 1,120 per month	€ 450 per month	19,20 %			Contact this member
Commercial space	€ 152,700	30	€ 2,216 per month	€ 946 per month	17,41 %			Contact this member
Building operator	N/A	30	€ 2,300 per months	€ 750 per month	N/A			Contact this member

* The gross returns indicated by our members do not take account of charges that may affect the net return.

How do you set up a self-storage centre ?

Setting up a self-storage centre is not difficult, but it is important to be well prepared. Here are the key stages :

• Carry out market research : analyse demand and the competition in your geographical area. Use the club simulator.
• Find an ideal location : Choose premises that are accessible, visible and have a dense catchment area.
• Financing your project : Draw up a solid business plan and look for sources of finance.
• Fitting out the premises : Divide the space into boxes of different sizes and install safety equipment.
• Set up management : Implement management software for reservations, payments and customer management.
• Promoting your centre : Develop a marketing strategy to attract customers.

How much does it cost to set up a self-storage centre ?

Before taking the plunge, it’s important to be aware of the costs involved

The price of a self-storage centre varies according to a number of factors, such as :

• Self-storage center size : more larger, the more it will cost.
• Location : centres located in dense urban areas are generally more expensive than those in rural areas.
• Construction type : a new-build will be more expensive than a refurbished one.
• Equipment : centres equipped with sophisticated security systems and ancillary services (such as the sale of packaging materials) will be more expensive.

Here is an overview of the main costs :

• Buying or renting the land or building : this is generally the largest item of expenditure.
• Fitting out the centre : this includes installing the lockers, doors, security systems, etc.
• Marketing and communication : it’s important to publicise your self-storage centre to attract customers.
• Staff costs : you may or may not need to hire staff to manage the centre and ensure the security of the goods stored. Depending on the size of the centre, there will be solutions to automate the reception of your customers.
• Running costs : these include rent, water and electricity bills, insurance, etc.

In addition to these initial costs, it is important to allow for ongoing running costs. These may include :

• Maintenance costs : it’s important to keep the centre in good condition to ensure the safety of the goods stored.
• Marketing and communication costs : it’s important to keep spreading the word about your self-storage facility to attract new customers.
• Staff costs : you may need to take on extra staff depending on demand.
• Running costs : rent, water and electricity bills, insurance, etc.

Setting up a self-storage center can be a profitable investment, but it’s important to be well informed, to have the right support and to anticipate all the costs involved before taking the plunge.

How much does it cost to fit out a self-storage center ?

Do you dream of setting up your own self-storage centre and embarking on a promising entrepreneurial adventure? But how much does it really cost to set up such a space ?

Setting up a self-storage centre involves a multitude of expenses, and it’s important to understand them in order to draw up a realistic budget :

• Rent : The price of renting commercial premises varies considerably depending on their size, location and condition. In France, average monthly rents for commercial premises are between € 10 and € 30 per square meter. For a 500 m² self-storage centre, this represents a monthly outlay of between € 5,000 and € 15,000.
• Buying : The purchase price of commercial premises also depends on their surface area, location and condition. In France, the average price per square metre of commercial premises is between € 1,500 and € 5,000. For a 500 m² self-storage centre, this represents an initial investment of € 750,000 to € 2,500,000.
• Renovation work : If the premises require renovation work, such as bringing them up to standard, insulating them or creating partitions, this will account for a significant proportion of the total cost. This varies according to the work involved.
• Interior fittings : Interior fittings include installing partitions to create cubicles, laying floor and wall coverings, lighting, signage and security. Between € 200 and € 400 per square meter.

Here are a few examples :

• Small centre (less than 500 square meter): Approximate development cost between € 25,000 and € 75,000.
• Medium-sized centre (500 to 1,000 square meter) : Approximate development cost between € 75,000 and € 150,000.
• Large centre (over 1,000 square meter) : Approximate development cost between € 150,000 and € 250,000.

3 misconceptions about self-storage

Self-storage takes time

Fact : Running a self-storage centre takes time and effort, but there are ways of optimising it.

• Automate tasks : online booking, online payment, access control, etc.
• Outsource certain tasks : accounting, maintenance, etc.
• Implement efficient processes : reservation management, customer reception, etc.
• Use management tools : dedicated management software, mobile application for customers, etc.
• Delegate certain tasks : accounting.

By optimising the management of your self-storage centre, you can considerably reduce the time you spend on it. It’s exactly what our club platform can do for you, with our on-line rental management module for example.

Self-storage is a very expensive investment

Fact : While the initial investment cost of setting up a self-storage centre can be significant, there are ways of reducing it.

• Find premises at an affordable price : look for less expensive areas or unused premises (garage, basement store room).
• Turn to rental : negotiate the price of the lease, etc.
• Start with a minimalist approach : small centre, small number of lockers.

The cost of an installation is between € 200 and € 600 per square meter (for the design), compared with € 1000 (minimum) for a dwelling.

Self-storage is a difficult investment, and not one that everyone can afford

Fact : While self-storage is a fast-growing sector with strong potential for profitability, it’s important to be well prepared and to follow certain key steps in order to succeed.

• Get trained and acquire knowledge : there are many training courses and resources available to help you understand the self-storage market and develop the skills you need to set up and run a profitable centre.
• Draw up a solid business plan : a business plan will enable you to define your strategy, quantify your investments and financial projections, and identify potential risks.
• Surround yourself with experts : don’t hesitate to call on experts in fields such as design, insurance, acquisition, financing, law, accounting, marketing, etc. to help you with your project.

By following these tips and committing yourself fully to your project, you can greatly increase your chances of success in self-storage, even if you have no previous experience in the sector.

Our conclusion on the creation of a self-storage centre

Setting up a self-storage centre using a commercial shed, warehouse or old premises is a very clever way of obtaining high-yield rental income. However, you need to assess the rental demand and storage needs in your area carefully. Before taking the plunge, we recommend that you get informed and receive the right support to put every chance of success on your side.

How to succeed in self-storage?

To succeed in self-storage, it is important to :

• Offer excellent customer service : Be responsive, welcoming and professional.
• Offer flexible storage solutions : Adapt your offerings to your customers’ needs.
• Keep abreast of market trends : Develop new services and adapt your offer to customers’ changing needs.
• Surround yourself with professionals : call on experts in self-storage (designer, insurer, security, marketing, legal).

Comment choisir un emplacement idéal pour un centre de self-stockage ?

What are the key stages in setting up a profitable self-storage centre ?

• Marketing : Développez une stratégie marketing pour attirer des clients (publicité en ligne, partenariats locaux, offres promotionnelles).
• Market research : Analyse the demand and competition in your geographical area.
• Location search : Choose a strategic, accessible and visible location, with a dense catchment area (individuals and professionals). Take account of local regulations.
• Financing : Draw up a solid business plan (financial forecast) and look for sources of financing (bank loans, personal contributions, crowdfunding).
• Layout : Divide the space into boxes of different sizes and provide easily accessible loading/unloading areas.
• Security : Install high-performance security systems (surveillance cameras, intruder alarms, access control).
• Management : Implement management software for reservations, payments and customer management.
• Marketing : Develop a marketing strategy to attract customers (online advertising, local partnerships, promotional offers).

Find out more from our expert

At 33, Nicolas Todo is an expert in the self-storage niche. He was one of the first to share his expertise in setting up self-storage centres in the city centre to enable private individuals and professionals alike to store their belongings and arrange their furniture.