Hi All,
Just wondering if anyone has had experience in sub dividing self Storage Sheds to add value.
I have a block of land with 34 Storage Sheds on it, each with their own roller door access but all under the same roof line.
I have seen larger companies such as Storage King do it and actualy sell off individual sheds, I guess to raise capital.I'm wondering if it could work just like sub dividing a block of flats, having each flat valued and the combined of each flat being worth more than having the block valued as a whole. The aim being to create some equity I could use to purchase some more property. I also have no idea has to the costs that would be involved.
I know this is a little away from residental property but I thought I would put it out there.
Cheers
Glenn
Do you really want to get 34 rate assessments? That's going to increase your operating costs considerably.
Hi Glenn, this is off topic but I was wondering how your experience has been with self storage sheds. Is there little hassles with this type of investment? Is there a huge demand? What size would you recommend? How do you go about insurance/insuring other peoples goods? Is there a book you can recommend so I can find out more info. Thanks in advance.
Try the Self Storage Association of Australia website for some information
Thanks crj!
Hi crj and millions, thanks for your comments.
Firstly sorry for my delay in replying I've been away with work and have only just had the chance to get to a computer.
crj, I hadn't considered the effect it would have on my rates, good point. I think some more homework is needed.millions, I'II try to answer each of your questions.
Is there little hassle? I've had no real hassle to speak of and I've had the sheds for roughly 5 years. I use a real estate agent to look after them as you would a residental property, all tenants pay a bond and then pay monthly. Minium lease is one month. Realestate fees 5% of rent collected plus $250 per quater. Using a realestate agent is a must unless you want to be chasing 34 people for money every month. I also use a security firm to unlock and lockup the property each day.
Is there a hugh demand? Well I guess that depends on the area you are in. Like anything you need to do your homework to see if there is a demand where you are. In general Australia still has a lot of scope for growth in the Self Storage industry compared to the figures coming out of America. I am in country Vic and my sheds have been 95+% full for the last 2 years, mind you the first couple of years where more around the 50% mark until we got established.
What size? The good thing about Self Storage is that you can pretty much rent out any size you like. If you are looking to build or convert an existing building you can use a variety of sizes to utilise every bit of space you have. In general there seems to be a couple of common sizes that are used 6m x 6m and 6m x 3m. The whole of my 34 are mostly these sizes.
6m x 6m = $110+gst per month and 6m x 3m = $60+gst ( these prices will vary depending on location )Insurance? The only insurance I hold is for the building itself. You do not have to have insurance in place for other peoples goods that are being stored in your building. In general peoples contents insurance will cover their goods while being stored in a Storage complex. The paperwork they sign when entering a lease explains this but advises each person should check their own policy. Some Self Storage complexs offer insurance at an extra cost.
More info? crj is right the Self Storage Association web site is the best place to start.
Hope all that helps
Cheers
GlennExcellent Glenn, thanks for reply. It looks like a pretty hassle free option. Definately worth investigating further. Cheers, Linda.
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