Hi Guys,My husband and I have 3 IPS and e are just about to start the process for our next purchase
we have been tossing the idea of storage facility and are hoping to get feedback from any one that has done this or looked at doing itCheers
ccpatHi ccpat
We have a small facility – 30 sheds and have found them to be a terrific 'hands-off' investment.
We chose to put ours in the hands of the local real estate agent to manage them – because we don't have the time and their office is just down the road, making it easy for renters as well.
We hold the security deposits in our off-set (because it's not residential) and refund them whenever someone moves out – the agent just flicks me an email to say they've left everything in order and I eft the refund.
Only challenge is most major banks will lend only 50% value as they're a specialised commercial property. The other brokers here may have other options available to them……
Having said that, we'd sell ours for $460K, (offering an investor 8% NET) so if someone had $230ish in cash or equity they'd be right to go on a smaller facility like ours.
Cheers, Traceyi thought about storage facilities too as they have passive income elements to them. However, I was keen to find more info about it too. Anyone know any good resources/books for storage facility investing in Australia?
Don't have any books to suggest but this website has some solid information on it: http://www.selfstoragesalesaustralia.com.au/index.ews
I recently came across your blog and have been reading along. I don’t know what to say except that I have enjoyed reading. If you want to invest in storage facility you need to suggest some bank loan for your commercial property.
Nice blog. I will keep visiting this blog very often. Thanks for sharing this..
town planner melbourne | urban planners | planning consultantsHello all,
I used to run a large storage & removals company in Adelaide.My view is NEVER again.i have since sold because of the problems associated with the clients,my experience was 50% were always late,you have to go through a lengthy process to evict or auction,i got taken to court twice with related storage issues,and won,but really,is it worth it??Put your $$$$$$$$$$$$$ into something else.
Cheers
Jim
Hi Jim,
Where abouts does the items get auctioned, onsite or at a auction house?
If onsite, how do I find out when these are held?jimmcintyre wrote:Hello all,I used to run a large storage & removals company in Adelaide.My view is NEVER again.i have since sold because of the problems associated with the clients,my experience was 50% were always late,you have to go through a lengthy process to evict or auction,i got taken to court twice with related storage issues,and won,but really,is it worth it??Put your $$$$$$$$$$$$$ into something else.
Cheers
Jim
I think my broker also mentioned difficulty in financing storage sheds even though the cashflow is good.
To auction is a lengthy process,ads in public notices etc,usually after 6 months of trying to get your money.We used to get auction houses in to clear the contents off the premises,they are usually advertised as default to rent,surplus sales etc.In the worst cases,i found over 60% of clients were either doing a runner from landlords,or ex partners etc,it can get very messy with he owns/she owns.Threats of bodily harm are frequent to intimidate you so in my opinion,its not worth it,if you think its right for you,get a good contract in place to cover yourself,as believe me,at some stage,you will require it!!
Jim, it's unfortunate that you had so many difficulties in your storage business. Thankfully we've had a very different experience with our small facility. Having them managed by the local real estate agent means I never have to deal with our clients. Of our 30 we currently have 2 that are slightly….several actually pay 12 months in advance to receive a discount! As soon as any are late paying my property manager is on to them and brings it up to date.
You are spot on re having a contract in place with the tenants – when we purchased they didn't ever sign anything and it was all done on a handshake. The first thing we did was put agreements in place with all existing and new clients. Clients know their obligations and our expectations are clear and thankfully we haven't had any of the issues you've mentioned. (Interestingly neither did the previous owners even with just a handshake agreement!)
I guess this thread highlights the importance of completing thorough due diligence before taking on a storage facility as an investment as no two are the same.
The positives were the money was good,and vacancy was nil,doing it again,i would be looking at a property manager to keep everything at arms length.But,im totally over it,good luck wiyh your venture.
From my research I have found that the returns are just not there. I think if you buy a complete
storage unit facility for the right price you could be on a winner. however having just one or two
does not seem to work for me.Yeah, it seems much easier to get your money back on an investment on a storage facility, if you decide to buy more than a dozen storage lots. Actually, a storage facility with at least 40 lots would be an ideal investment, if they are smack-dab in the middle of a busy area of the city.
I believe there are always pros and cons in any business. One thing that you should look at if you want to invest in storage facility is a good disposal program in case your tenants don’t pay and you will be left out with their items in your storage. Try to search this website for more information http://www.gosteelgo.com/self-storage-buildings.html
Hi M.Investigator is there any particular reason you continue to post links to foreign websites when this forum is predominantly for Australian investing? I am concerned that newcomer investors to the site might not realise that some of the advice/legislation is not relevant to Australia.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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