How to Invest in Self-Storage Units for Sale in Sacramento, CA
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
This article was updated on 9/21/23.
Migration to Sacramento, CA has increased exponentially, and so has the need for self-storage units. Many California Bay Area residents are seeking the slower and laid-back lifestyle found in Sacramento.
However, moving is never an easy process. That's why families look to find storage units for sale around the area they'll be living in. It's overwhelming to stuff possessions into a new place only to quickly return the moving van you've rented. Self-storage buildings offer private and secure depositories for unused items taking up space.
Additionally, Sacramento sees transient movement from busy workers. It's common for people to live part-time in Sacramento, and then work or live in another part of the state. A self-storage unit for transients is an organized way they can keep their things together.
Families are not the only ones to use self-storage: There are a variety of self-storage types to suit different needs, such as for those with special items or large vehicles.
Let's take a closer look at how special-purpose real estate investors can profit from investing in self-storage units for sale in Sacramento, CA.
The Different Types of Self-Storage Units
Not all self-storage units for sale are built the same. Additionally, self-storage units operate differently from traditional storage units. Noting these contrasts can help investors decide if working with self-storage units is right for them, as well as which kinds to offer.
Self-storage means that unit renters can come and go from their storage whenever the facility is open. Traditional storage may not allow frequent visits to units. Items used occasionally, like holiday decorations and special event clothing, are best for traditional storage.
Most traditional storage facilities offer pick-up and drop-off services. Self-storage businesses do not, which is why its name indicates more autonomy for clients.
Once you decide to delve into the self-storage industry, you will have to choose which kinds of units you'll want to offer.
- Climate-Controlled Storage: Sacramento's winters are mild, but its summers can get hot. Heatwaves roll through the area, which can damage items, especially those in a closed space. Climate-controlled storage offers temperature control to help keep items safe and intact.
- Around-the-Clock Storage: Some clients may not have the time to access their storage during regular business hours. Twenty-four-hour self-storage units can allow customers to access their items anytime; however, hiring security for all hours will be necessary to make this possible.
- Drive-Up Storage: Drive-up or outdoor self-storage facilities allow clients to drive vehicles up to their unit. This convenience is ideal for those with a lot of items or larger items. Since unit doors are accessed outdoors, security measures may need to be more strict than indoor storage units.
- Business Storage: Large and small businesses have transitioned away from offices to work from home. This change may be permanent for many companies. Business owners can use self-storage units to hold supplies and inventory instead of keeping an office.
- Mixed-Use Storage: Storage facilities can take the business storage concept further by setting them up near hubs of business. This easy access will be attractive to those who are in need of storing business items.
- Vehicle Storage: Luxury cars, extra cars, boats, planes, and vehicles can safely rest in a storage unit. These units will have to be large and in close proximity to where the vehicles can be used. For example, a boat storage facility should be near a harbor. Temperature control is also recommended for vehicle storage.
As you consider which storage units for sale you'd want to invest in, you should search for appropriate locations for the type that you are building. Drive-up and standard self-storage facilities will gain more business by being closer to residential areas.
The Benefits of Investing in Self-Storage Units
How can investing in self-storage buildings for sale near you be more beneficial than other types of commercial properties?
- Constant Demand: The transient lifestyle in California makes storage facilities necessary for residents moving through Sacramento.
- Population Growth in Sacramento: Sacramento has seen notable increases in people moving from the Bay Area in 2023.
- Fewer Utilities: Since self-storage does not host people as often as other commercial properties, like warehouses, there are fewer utilities to take care of. This makes for a more hands-free investment.
- Low Costs: Storage units require simple construction and are not expensive to build.
- Easy Rent: Most storage facilities offer month-to-month leases for clients. This is appealing to customers who may not need a unit for long periods of time.
- Less Upkeep: Maintenance and upkeep will be less demanding due to the lack of utilities and simple building structure.
Self-storage units for sale are an easy source of passive income for investors due to their minimal maintenance.
Popular Reasons Why Customers May Rent Your Storage Space
Sacramento hosts a variety of families, businesses, and college students. These groups look into self-storage for their own convenience and ease of mind.
- Safety: Valuable items are more vulnerable sitting in homes.
- Frequent Travel: Transient workers and college students need a spot to keep items when they travel often or leave the area for long periods of time.
- House Renovations: Families renovating their property need space for their things.
- Archives: Business archives can take up necessary space in offices. Self-storage makes retrieving documents accessible and keeps them out of the way.
- Divorce and Separation: Relationship changes call for moving around items. Self-storage units for sale can house vehicles, furniture, and clutter while living situations are being arranged.
These are some of the top reasons why people use self-storage. Other uses, like storing antiques, are common as well. Depending on where you set up your facility, you may come across clients with different storage needs based on the surrounding demographic.
How to Locate Storage Buildings for Sale Near You
The ideal locations for storage buildings are environmentally fit and close to potential clients. Self-storage buildings that are too far from suburban areas will not attract as many customers as units near neighborhoods and metropolitan areas.
You also don't want units in an area that is so busy it would be difficult to move to and from the units. Clients take easy accessibility into huge consideration. The purpose of self-storage is for renters to retrieve their items whenever they need to.
What to Consider When Buying Storage Units for Sale
Investing in any commercial property requires an understanding of all necessities to operate. Here is what investors should think about when they're buying storage units for sale:
- Environmental Assessments;
- Security;
- Coordinating Clients;
- Real Estate Taxes;
- Merchant Account and Finances;
- Maintenance and Upkeep;
- Setting Up Office; and
- Internet and Software.
Considering the return on investment buyers can experience, these factors are not difficult to take care of for long-term success in self-storage.
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