The title is lame. He didn't get rich selling empty space. He got rich selling what's enclosing that empty space.
Self-storage: The men who got rich selling empty space
11–20 of 68 posts
Re: Self-storage: The men who got rich selling empty space
#12Whether it's for economic (less spending money), technological (mp3s are a lot smaller than CDs), or simply cultural reasons, the younger generation seems to have less stuff. I see an opportunity in 5-10 years...microapartments in former self-storage space?
Some people already run mail-order businesses from self-storage units:
Re: Self-storage: The men who got rich selling empty space
#13Earlier quoted context omitted.
I had a 10x20' storage unit for years -- it was full of all the stuff you mentioned - CDs, stereo, furniture, an astoundingly heavy 34" tube TV... All the media went digital (with multiple backups!) and everything else was either sold on Craigslist, donated, or hauled away to the landfill. Now I can move by just renting a small trailer.
Why didn't you just sell the non-essential things and make room for the rest? I only ask because I have lived in 7 different properties since starting University and now (almost three years into career) and I literally take what I need and chuck the rest; one could probably describe me as the 'anti-hoarder'.
They'd been in storage for over 3 years and I hadn't needed to use them, therefore I didn't need them at all.
I kept some things that were keepsakes, but the rest ... out with it all. Which also saved me $135 a month in rental costs.
Re: Self-storage: The men who got rich selling empty space
#14Earlier quoted context omitted.
It's also a great example of the general principle that it's good business to try and figure out how to disproportionately leverage public resources. Say police protection and property enforcement was privatized. Under such circumstances, the cost of security for a storage facility would be substantial. But in a society where the public pays for security, it's "free" to create a business that presents an outsized tar…
Hardly. Physical security at self-storage facilities is comparable to that at non-classified government installations - at least the ones I've seen in Canada: Perimeter fencing with logged access control, CCTVs and live monitoring, individual locks on storage areas, etc. Add the cost of insurance, bonding, etc., and there is absolutely no "free" involved.
That's the security expenditure assuming the backdrop of government enforcement of property rights. Imagine running a storage facility in a place like Somalia. You'd need way more than a perimeter fence and monitoring!
When my family lived in Bangladesh, we once had a band of thieves (in a van/bus with guns) try to break down our gate. One of those would roll through the security at your typical storage facility.
Re: Self-storage: The men who got rich selling empty space
#15"Danny Dorling, professor of geography at Oxford University, says we have six times more "stuff" than the generation before us." I run a storage business and I can say that this is no longer the case with the younger generation. We used to store boxes of CDs, Videos, 14" Colour TVs, Desktop Computers, Hifis. Now all this is in a laptop and mobile phone, which people just take with them. We now insist on up-front paym…
Do you see the overall demand profile for self-storage changing accordingly, i.e. it could be headed for a secular decline because younger demographics don't accumulate as many physical items? When I was brainstorming startup ideas once I mentally kicked around "AirBNB for self-storage," but liability issues and what I saw as a trend towards minimalism among those who would have been a target demographic as reasons t…
> younger demographics don't accumulate as many physical items?
We'll see how that plays out as they age, which tends to include things like getting married, having kids, buying a house, and that kind of thing. For instance, our garage now contains 2 strollers, 2 kiddy scooters, 3 kiddy biycles of varying sizes, and one sort of push-tricycle thing. I didn't have all that crap when I was younger, either!
I heartily agree with the advice elsewhere to look at "boring" and "unsexy" stuff. It also helps if it's "far from the tree" in the sense of not picking something that's immediately related to the world you know as a programmer.
Re: Self-storage: The men who got rich selling empty space
#16I never understood friends who put things in storage. It was their used furniture and things they never used. But they'd gladly play $100/month to store it away for 2-3 years at a time. You're better off just selling it and buy new (used) things in a year or two.
Not to mention the hassle of moving things to and from the storage unit!
Re: Self-storage: The men who got rich selling empty space
#17Whether it's for economic (less spending money), technological (mp3s are a lot smaller than CDs), or simply cultural reasons, the younger generation seems to have less stuff. I see an opportunity in 5-10 years...microapartments in former self-storage space?
Some people already run mail-order businesses from self-storage units: http://www.bbc.co.uk/news/business-25336446
This seems like a more likely outcome than living spaces. If for no other reason than a lack of water/electric outlets for home use. Air-conditioned storage units could make decent (depending on location) store fronts as well, in a sort of industrial mall sort of way.
Re: Self-storage: The men who got rich selling empty space
#18"Danny Dorling, professor of geography at Oxford University, says we have six times more "stuff" than the generation before us." I run a storage business and I can say that this is no longer the case with the younger generation. We used to store boxes of CDs, Videos, 14" Colour TVs, Desktop Computers, Hifis. Now all this is in a laptop and mobile phone, which people just take with them. We now insist on up-front paym…
I'll confirm this. I'm much older than the "younger" generation and I have virtually nothing compared to my parents and theirs. I can get everything I own in a 45l bag and a large box. They can't get all their crap in a 4 bedroom house with a double garage.
Also as a side issue, yes you're right; absolutely nothing out there is worth much any more. The Internet and particularly eBay has laid waste to the value of things by making everthing ubiquitous.
Re: Self-storage: The men who got rich selling empty space
#19This article misses the entire point of the self storage game, in that it's all about real estate. I'm not sure of the structure they have over in the UK but I'm quite sure it's the same type of thing, considering that land over there is much more valuable.
Here in the US you'll find a vast majority of the land used for self-storage is owned by either investment firms specializing in commercial/self-storage real estate, MLP's (Master Limited Partnerships), or REIT's (Real Estate Investment Trusts). There are a lot of nuances to it, but essentially these are tax vehicles that buy up a bunch of not particularly sexy land, but in an industrious location that has long term potential. The issue then becomes what to do with the land while you sit on it, and the answer to that is self-storage. Self-storage warehouses are incredibly cheap to build and operate, often times the largest cost is insurance (although that's not saying much nowadays). Many MLP's/REIT's either own their own self-storage company, own a controlling share in one, or at least own a good percentage of one, or the self-storage company in and of itself is an investment firm wrapped in a thin veneer of self-storage. Thus, on top of the rent you can get a nice cut of the storage profits. It's a fantastic racket if you can get momentum, after a certain point the money essentially prints itself and you still have control of a massive chunk of land to boot. The self-storage business is also very predictable, and highly tuned, so the investment returns on both the land and the storage business are very conducive to long term wealth building.
Re: Self-storage: The men who got rich selling empty space
#20"Danny Dorling, professor of geography at Oxford University, says we have six times more "stuff" than the generation before us." I run a storage business and I can say that this is no longer the case with the younger generation. We used to store boxes of CDs, Videos, 14" Colour TVs, Desktop Computers, Hifis. Now all this is in a laptop and mobile phone, which people just take with them. We now insist on up-front paym…
"We now insist on up-front payment as the items people store are worthless to sell." Was this ever different? Boxes of CD's, videos and tube TV's don't sound that valuable. But reading into your comment, it seems it wasn't always like this...
It might now seem that way, but when you can put those things into a second hand shop for $1-$5 a piece someone's DVD, or CD collection can become quite valuable when its abandoned. Some people did/do store hundreds of cd's, dvds, and the like. A unit could have a thousand dollars(in real secondhand market value) of merch very easily.