5 Types of Self Storage Facilities: A Guide for Investors

When first dipping your toes into the self-storage investment space, it’s natural to assume all facilities look and operate similarly. They’re large, rectangular boxes with smaller boxes inside, complete with metal roll down doors and concrete floors. In reality, storage units can vary greatly, with each type of facility offering renters different advantages.

Why is it important for self-storage investors to know the difference between facilities? Because these distinctions can impact the initial cost and potential return on investments.

Here are a few of the most common types of self-storage facilities investors need to know.

Climate or Non-climate-controlled

One of the most common distinctions between units (besides size) is whether or not they’re climate-controlled. Facilities that offer climate-controlled units can charge more per square foot since the facility regulates the temperature and humidity within the units. Units that are non-climate-controlled are less expensive to operate, which typically translates to lower rental rates as well.

Climate-controlled units are ideal for locations with extreme weather, such as harsh winters or hot summers. But having humidity control is also helpful in places with swampy conditions or dry, arid climates. For facilities located in mild environments with little temperature fluctuation, such as San Diego, non-climate-controlled units may be more common.

Most markets, no matter the environment, have at least some demand for climate-controlled units. Renters need a safe and secure space to store fragile items like antiques, fabrics, or other temperature-sensitive belongings—and they’re willing to pay extra for it.

Indoor or Outdoor Units

The last time you visited a self-storage facility, think about how you accessed (or could access) a unit. Did you have to enter a building and walk through a hallway to unlock your unit? Or was it accessible from the outside of the building?

Unit location may be taken granted, but it does impact how renters view a facility and its ability to meet their needs. For example, outdoor units provide easier access to renters since they can (in most cases) drive right up to it. If they have a lot of items, especially bulky or heavy items, to unload and store in the unit, this could be a big advantage.

On the other hand, indoor units can only be accessed by entering a building—which may require a passcode or key fob. Indoor units are more likely to have climate control, and the potential extra layer of security could provide renters a greater peace of mind.

Portable

Just as it sounds, portable self-storage units can be delivered straight to your property. This is typically a more expensive option for consumers than using a facility, but it also offers more convenience.

Currently, our team does not offer investment opportunities in portable self-storage. This particular type of storage is primarily run by large franchised operations or corporations.

Commercial

When we talk about self-storage facilities as investment opportunities, we typically focus on the types of operations that serve families and individuals. But businesses need space to store inventory and supplies as well, which is what a commercial self-storage facility specializes in doing.

Rather than contain a bunch of small units, commercial storage more closely resembles a warehouse. They often include loading docks for trucks to easily back up to and unload items when needed, and the facilities themselves have high ceilings and expansive storage space.

These buildings are designed to house especially big items (like equipment) or large quantities (like excess inventory).

RV, Boats, Cars, and Other Specialty Items

At Belrose, we’ve had an increase in interest from private investors to learn more about specialty storage investment opportunities.

In many towns, especially along the coastline, families are challenged with finding suitable storage for large items like boats and RVs. Homeowner associations (HOAs) often don’t allow homeowners to store these items on their property, which creates the need for safe and accessible storage. Not to mention, storing expensive equipment or vehicles in a yard leaves them exposed to the elements and more prone to theft or vandalism.

Some self-storage facilities are specifically built to accommodate items such as RVs, boats, and cars.

Interested in Investing in Self-Storage?

At Belrose, we’re big believers in understanding what, exactly, you’re investing in before committing to it. If you’re curious about what goes into the facility selection process or you’d like to hear more about our upcoming investment opportunities, send us a message anytime.