Two meanings: owning a facility vs owning a unit
“Owning storage units” can mean two different things. Some people buy or build a self storage facility and rent units to tenants as a business. Others own a single unit outright, which is less common and may be possible in some condo-style storage properties. This article focuses on the business side, with a short section at the end on personal use. This is general information, not financial advice, so talk to a licensed professional about your own situation.
Pros of owning storage units
- Recurring rental income. Monthly rent can provide a predictable income stream when units are occupied.
- Lower operating demands. Facilities often need less maintenance than residential rentals, and management can be partly automated, though it is never zero effort.
- Simpler tenant relationships. Storage rentals generally involve different rules than residential leases, with fewer maintenance requests, but laws vary by location.
- Scalability. You can add units, phases or more properties over time, and some owners manage remotely or with on-site staff.
- Additional revenue sources. Options may include tenant insurance, retail supplies such as boxes and locks, and added services.
- Potential tax benefits. Depreciation and expense deductions may apply, depending on your circumstances.
- Demand tied to life events. Moves, downsizing and renovations are ongoing reasons people rent. See our overview of the benefits of self storage to understand what tenants want.
Cons of owning storage units
- High upfront investment. Land, construction or acquisition, and financing can require substantial capital.
- Competition. Large chains and nearby facilities compete on price, marketing and features.
- Location dependence. A poor location can mean low occupancy for years.
- Occupancy and rate swings. Local economic changes, new supply and seasonal patterns can affect income.
- Tenant issues. Late payments, abandoned units and disputes happen, and handling them takes time and legal care.
- Ongoing costs. Property taxes, insurance, security, marketing, software and repairs add up.
- Security and liability. Break-ins, damage or weather events can bring claims and costs.
- Long commitment. A facility can be hard to sell or repurpose quickly.
Is owning a storage unit a good investment?
It can be for some investors, but results depend heavily on location, purchase price, financing, management and local competition. No source can promise returns. Before buying, run realistic numbers with conservative occupancy assumptions, and compare against other options you might consider.
How much do storage unit owners make per month?
There is no reliable single figure. Income depends on number of units, rental rates, occupancy, expenses and debt. A small facility and a large one differ widely, and net profit can be much lower than gross rent once costs are counted. Ask any seller for several years of actual financial statements and have an accountant review them.
Can a storage unit be a tax write-off?
For an owner running a rental business, certain expenses and depreciation may be deductible, depending on local tax law. For a tenant renting a unit to store personal items, deductions are generally limited, though there may be exceptions for business storage. Tax rules change and depend on your situation, so consult a qualified tax professional.
Is it worth having a storage unit for personal use?
If you only need space for your own belongings, renting is usually simpler than owning. Rent can be stopped when you no longer need it. See storage costs for a three bedroom house and sizing a unit for a one bedroom apartment if you are comparing options.
Due diligence before buying
- Review local demand, population trends and competing facilities.
- Check zoning, permits and any restrictions.
- Inspect the buildings, doors, security systems and drainage.
- Examine rent rolls, occupancy history, delinquencies and operating expenses.
- Understand how overdue accounts are handled in your state, including lien sales. Learning how storage unit auctions work gives you a sense of that process.
- Get legal, accounting and insurance advice.
- Plan for slow periods and extra cash reserves.
Alternatives
If you want exposure to the storage market without running a facility, some investors look at publicly traded real estate investment trusts or partnerships. These come with their own risks, so research them carefully or speak with a licensed advisor. If you simply want extra space at home, consider decluttering or using a rented unit for a limited time.