by Marc Goodin, an excerpt from his book: Self Storage Is It Your Vehicle To Wealth?
Are You Ready To Own Your Business? Self-Storage?
The first question you must ask yourself is, are you truly ready to own your own business. Only 1-3 percent of the population are willing to put in the work and have the mindset to own their own business.
There are a lot of good reasons to own your own business like:
Be own boss
Make more money
Early retirement opportunity
Retirement nest egg when business is sold or refinanced.
Sure, it is easy to say yes to the above. But it is not always to do the work and make the investment. Owning your own business may not be for you if:
Just not in your DNA for any reason.
Don’t want to be in charge.
Don’t want to invest time & money.
Don’t want to make every decision.
Want all your nights and weekends free
Are not willing to take a risk.
Might give up at the first, second, third…….or the hundredth roadblock in your way.
Your first step is to decide if you are willing to spend your limited time to build a business. If you’re not sure by the time you finish reading this book the answer is no.
If business ownership is for you your next step is to decide what type of business. One common business is a professional service business like engineering, IT profession, doctor, nurse, etc. These businesses may pay well but, in the end, like I was, you are still trading dollars for hours. And unfortunately, as the owner, you are going to spend more time on paperwork and staff related items than on the profession. I know this from experience as a civil engineer and owner of an engineering and surveying company for many years.
A second option and often the best business option is a real estate business. Real estate makes more millionaires than any other businesses for several reasons, but the key three reasons are:
Depreciation – You don’t have to pay tax on all the money you make.
Appreciation – It is inflation- proof because the value goes up with time. And you increase occupancy at higher rental rates to beat inflation as well.
Amortization – You do not have to come up with most of the money and can pay it back over many years so you can make higher profits then other business.
Self-storage is one of the best real estate businesses for many reasons including:
● You can build a 6-figure income while you continue your career
● You can build a significant retirement nest egg
● Be your own boss – flexible work schedule
● Self-Storage can be a lifestyle business (own one facility) or a growth business opportunity (own multiple facilities)
● Loan friendly – due to one of the lowest real estate business loan failure rates.
● Recession resistance. During Covid, most self-storage saw was a dramatic increase in rentals and rental rates.
● Opportunities like franchising and management companies are available where you can lean on their systems & experience and significantly reduce your time.
● Many self-storages are run like a real estate investment and not a business. By incorporating a “Ritz style” over the top, remarkable customer service and a sales and marketing plan you can make significantly more than many existing self-storage facilities.
● By developing from the ground up you can invest significantly less and make significantly more than buying an existing facility.
● Self-storage is a 39 Billion Dollar business and growing over a billion dollars a year.
● Self-storage rental rates and occupancy are at all-time highs.
● Self Storage is SBA approved which means you only need 15% cash down and can borrow the soft and carrying costs.
● Most self-storages are not premium facilities because the owner does not have the experience nor the 20 plus hours a week to develop the experience, manuals, training systems and platforms a premium facility requires, on their own.
● A 15% down $5,000,000 SBA loan will require a $750K cash investment on your part (Con: a lot of money, Pro: just 15% cash down)
● Expensive to buy an existing facility, so they provide lower returns.
● New development takes time to find land, design, and obtain approvals, build, and rent up.
● Development has many minefields, and you will need experts to guide you through the development process