This article takes the view of the consumer, "Why do so many people pay to store items they almost never use?". But in actuality, the interesting part of this is why is there so much supply of self-storage businesses?
The answer is: cash flow. Self-storage businesses are the almost perfect solution for someone with a good size (but not enormous) bucket of money that they want to put to work generating cashflow:
1. Cheap build out (cheap land, cheap facilities)
2. Almost entirely hands-off (no employees, automated entry)
3. Low liability (low risk of customers suing you)
4. Low overhead (just pay for taxes, electricity, minimal maintenance)
5. Reliable monthly cash flow
The abundant supply of these businesses, I suspect, tends to generate demand: it's easier to pay $80/month to store your junk than spend the time and emotional labor of picking through what you want to keep and what you want to get rid of. That ends up being captive long-term revenue.
$80/month that becomes $120/month and then $200/month within a year or two, and they mail you a postcard to tell you about it. I guess that's another nice perk of the business.
The other perk is they charge “mandatory” insurance fees. It is easy to opt out if you prove you have insurance but at least the facility I am using makes it seem like it is hard.
They will also "accidentally" re-add the insurance fees. I had a storage unit for about a year while sorting through my brother's estate, and without fail every 3 months the insurance fee would get added back on. I was so glad when I was able to cancel that lease, it was maddening to have to keep calling about the same issue.
My son's college did the same thing. Every term, the billing for tuition and fees would include (a very expensive) fee for heath insurance. I would have to declare again that he was covered on my plan as a dependent and he didn't need the school's plan.
I'm convinced they do this because the kids using student loans aren't paying attention.
epochbtc · · focus · HN ↗
The answer is: cash flow. Self-storage businesses are the almost perfect solution for someone with a good size (but not enormous) bucket of money that they want to put to work generating cashflow:
1. Cheap build out (cheap land, cheap facilities) 2. Almost entirely hands-off (no employees, automated entry) 3. Low liability (low risk of customers suing you) 4. Low overhead (just pay for taxes, electricity, minimal maintenance) 5. Reliable monthly cash flow
The abundant supply of these businesses, I suspect, tends to generate demand: it's easier to pay $80/month to store your junk than spend the time and emotional labor of picking through what you want to keep and what you want to get rid of. That ends up being captive long-term revenue.
sehugg · · focus · HN ↗
cogogo · · focus · HN ↗
zrobotics · · focus · HN ↗
SoftTalker · · focus · HN ↗
I'm convinced they do this because the kids using student loans aren't paying attention.