According to the Self Storage Association, self storage has been one of the fastest-growing pieces of the U.S. commercial real estate industry for more than three decades. And it’s no surprise. We have a lot of stuff, and we like to keep it.
That’s evident from these statistics from the association’s 2012 fact sheet:
- There are about 58,500 self-storage facilities worldwide;
- The total rentable self-storage space in the U.S. is more than 2.3 billion square feet, about three times the square footage of Manhattan;
- Over half of the U.S. self-storage facilities (52 percent) are in suburban areas;
- The self-storage industry offers about 20 square feet of storage space per U.S. household;
- About 10 percent of U.S. households rent a storage unit.
Having worked with my husband as an on-site self-storage site manager a few years ago, I’ve seen this industry up close. And, really, it has a lot to offer. There are plenty of times when a short-term rental of a self-storage unit is a wise financial and personal move.
For instance, we used self storage back in 2009 when we were between apartments for two weeks. (Ironically, we were moving out of the storage facility, where we had an on-site apartment, and into a new apartment during a job change.) I’m not sure what we would have done with all of our stuff had it not been for that self-storage unit.
On the flip side, you wouldn’t believe the craziness you encounter at a self-storage facility.
Customers would rent self-storage units for years for the most bizarre reasons. Some would pay for half-empty units. One customer rented two huge units, paid more than $1,000 a year, that she hadn’t opened in more than a decade.
And that’s not to mention the people who lose their stored stuff because they wouldn’t or couldn’t pay their rental fees. (Yes, what you see on “Storage Wars” is at least partially real. We ran a few auctions at our site ourselves.)
Wondering when you can and should use a self-storage unit, and when it’s just a waste of money? Here’s what you need to know:
Some Legitimate Uses for Self Storage
This list isn’t going to cover them all, but suffice it to say that if your self-storage unit is saving you money, or if you’re using it for a limited period, it’s probably OK. Here are some examples of smart self-storage use:
Moving, Buying or Selling a Home
This is one of the best times to invest in self storage. Like I said, when we were between apartments, we used a storage unit for a month. It’s not like you can take your couch and dining room table with you when you’re crashing on your parents’ couch for a week before you move into a new apartment.
If you’re moving for your job and don’t yet have a place to live, storage is a good option. Likewise, if you need to make your home more presentable while it’s on the market, but don’t want to get rid of your stuff, rent a storage unit.
Paying for a Bit of Extra Space
Some of the smallest storage units at our location, about the size of a walk-in closet, were really affordable. Prices vary by company and location, but you can get storage space for a song if you look hard enough.
A storage unit might save you money, if you’re having trouble fitting into your space. Consider whether using a storage unit to hold less-often-used items would cost less than upgrading to a larger home or apartment.
Protecting an Investment
Maybe you love muscle or antique cars, or have a collection that’s worth quite a bit of money. If you don’t have room to keep your investment safe at home, a storage unit could be worth your while.
Again, you need to run a cost-benefit analysis. If you’re really into this collection or item and can afford a storage unit, go for it. But if it’s going to take a chunk of your budget, make sure the cost is worth the payback when you cash in that investment.
For Business Purposes
Self-storage units can make a great deal of sense for small-business owners. For instance, our location hosted a couple of contractors and a lawn care company. Rather than renting an office with a built-in warehouse, these companies paid much smaller fees for a storage unit for their business equipment.
If you don’t have lots of equipment but are overflowing with paperwork, a small storage unit stocked with file cabinets may also be a good solution. As a business owner, you have to keep paperwork for years. Again, renting a storage unit may be cheaper, in the long run, than upgrading to a larger office or home office.
When Self Storage is a Terrible Investment
Self storage is the wrong choice when you’re dumping money into it and not getting anything out of it – not a place to put your goods in between homes, not money back on an investment, not savings on extra space that you need anyway. Here are some specific times when you shouldn’t rent a self-storage unit:
Storing Stuff You Don’t Want or Need
Let’s be honest, most of us have at least a few boxes’ worth of stuff that we don’t want or need. Maybe they’re sentimental items, or maybe it’s junk you don’t know how to get rid of.
Have a garage sale. Go to the local dump. Drop it off at Goodwill. But for heaven’s sake, don’t dump money into a storage unit to hold things you don’t want. That’s just a waste.
Unnecessarily Long-Term Storage
Storage for the short-term when you need it is great, which is why most self-storage locations offer a month-to-month contract. But it’s easy, once you have that unit sitting there, to keep putting off making decisions about the stuff inside.
Remember, every check you write because you don’t want to deal with the contents of your unit is wasted money.
Storage You Can’t Afford
There are people who assume that a storage company will keep their stuff on hand until they can pay months’ worth of back fees. That’s not how it works.
The laws are different in every states, but renting a storage unit is similar to renting an apartment. If you don’t pay and keep up your end of the contract, your landlord (or storage owner) has every right to throw you out.
And in the world of storage, that means lots of certified letters and an auction at which you’ll lose all the stuff you had in storage.
Many times, units that are auctioned off are full of junk. Their owners just didn’t want to deal with it, so they left it to the company. But in a few cases, we heard some really sad stories about valuable family heirlooms or necessary items that were sold off because someone couldn’t afford the storage fees.
Lesson: If you truly need the storage, make sure you can pay for it. Those fees should go right next to rent and groceries in your spending list.
The bottom line is this: before you rent a storage unit for any length of time, understand what benefit you’re getting out of it. Is it really saving you money – or a great deal of hassle – in the long run? Or is it just going to become a money sink?
Also, before you rent and move into a storage unit, get rid of as much stuff as possible. The smaller the unit, the more money you’ll save in the long run.
Have you ever paid for self storage? What for? Did you regret your decision, or think it was a good one?Topics: Smart Spending