What Is a Reasonable ROI for Storage Facilities?

Self-storage units are a business model that continues to do relatively well, even in economic downturns as more people relocate to smaller homes but want to keep their possessions.

ROI

The return on investment (ROI) rate for self-storage facilities is dependent on a number of factors, but at an average 13.4 percent, it is generally higher than real estate investments.

Location

Possibly the most important factor in determining the ROI for your storage facility is its location. Look for a high traffic location that has at least 20,000 to 30,000 cars passing by each day. A storage facility in a low-traffic area will have a significantly lower ROI.

 

Competition

While most storage facilities tend to have an occupancy rate of about 80 percent, you will want to avoid locating your storage facility too close to an existing facility. Storage facilities have done well across the U.S., but it has been noted that the West Coast has an overabundance of storage facilities (as of February 2011).