Storage Unit Investment

Discussion in 'Commercial Property' started by Ryno, 22nd Oct, 2019.

Join Australia's most dynamic and respected property investment community
  1. Ryno

    Ryno Well-Known Member

    Joined:
    29th Sep, 2015
    Posts:
    64
    Location:
    Sydney
    Hey Guys

    Just after some info/advise/feedback etc

    I had a ad pop up for investing in storage units. It sounded interesting and looks a safer option if I was to expand out to commercial property. Thought this might be a good investment if I was to set up a SMSF.
    I'm not a business owner or self employed so just wondering if it's still a worthy investment to look into.
    I have a few inv properties but never considered commercial until the add popped up.

    Thanks for your time.

    Regards
     
  2. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    3,441
    Location:
    Mt Druuiitt
    I saw a billboard, on the Hume Highway near Chullora, which advertised brand new storage units from $88K. They were about 20sq metres in size and high enough for 2 levels

    I have no idea what the outgoings would be.

    I imagine they have toilet facilities so I was thinking they could be used as cheap accomodation.

    I'm saying that because I have used many 24 hour storage units and usually paid about $400 pm.

    One place I rented in St Marys had a hillbilly family living in one of the units. They had a pet dog and were smoking, which is not allowed. The roller door of the unit was up and junk was strewn everywhere lol.

    The manager of the place said he engaged a solicitor months ago to try and kick them out but it's not easy.

    I think if they were discreet, someone could live in a storage unit and easily pay $150 pw. Alternately, they could be rented out as a storage facility.
     
    Cousinit and Gladys like this.
  3. Ted Varrick

    Ted Varrick Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    1,758
    Location:
    No Mans Land
    Wow, this might be the next big thing, and since it's not policed by strata laws, you wouldn't even have to worry about nuisance complaints in NCAT about smoking. Or pets.

    If only this would have been thought of when Masters went bust, and you could've filled all their their huge carparks with 40ft "storage" containers...
     
    datto likes this.
  4. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    16,593
    Location:
    Sydney or NSW or Australia
    Was it these ones? Sub $1M commercial warehouses Sydney
     
  5. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    3,441
    Location:
    Mt Druuiitt

    No don't think so. I'll do some research and find them. Pretty sure they were located on corner Muir Rd and Hume hwy
     
  6. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    3,441
    Location:
    Mt Druuiitt
    I could have saved Woolies a lot of dough if only they read PC and consulted me (small fee plus % of profit). I could have made Woolies great again!
     
    Ted Varrick likes this.
  7. Ryno

    Ryno Well-Known Member

    Joined:
    29th Sep, 2015
    Posts:
    64
    Location:
    Sydney
    Research says it's big in America. Good yields low over heads and low vacancy rates. Someone always needs storage.
    Business owners and self employed can buy a storage unit and rent it to themselves and basically pays there super. Instead of paying a private landlord.
    My research says to buy multiple units so if one is vacant your still receiving cashflow.
    I was just seeing if anybody does this. Would this be a good option for a SMSF or an investment into commercial.
     
  8. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    11,550
    Location:
    Sydney
    Investments are generally based on : Yield, growth, cashflow and their liquidity if a stable reliable market is needed to quit the investment. A hillbilly garage or temporary methlab probably has none of this.

    Owning a entitlement for use of a property is very different to owning a storage centre. If the operator goes bust what do you have ? Maybe no access and are just a unsecured creditor with a vague lease you cant enforce. And a high risk of loss caused by others eg fire. theft etc I have watched those storage hunter TV shows and bolt cutters or a rechargeable grinder has it open in seconds.
     
    datto and Beano like this.
  9. Beano

    Beano Well-Known Member

    Joined:
    7th Apr, 2016
    Posts:
    2,022
    Location:
    Brisbane
    A previous tenant created about 40 of these units within a warehouse.
    I found it too much administration to manage them.
    Removed the lot
    (Change of direction for my portfolio with a move to less tenants , less payments (annual), larger tenancies and longer leases resulting in less admin work.)
     
    Luke T likes this.
  10. jim1964

    jim1964 1941

    Joined:
    18th Jun, 2015
    Posts:
    1,214
    Location:
    Adelaide S.A.
    I owned a storage complex once.A great cash cow.One of my regrets i didnt follow on with expansions a decade ago.
     
    datto likes this.
  11. Beano

    Beano Well-Known Member

    Joined:
    7th Apr, 2016
    Posts:
    2,022
    Location:
    Brisbane
    What net yield did you get ?
     
  12. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    3,543
    Location:
    Australia
    Thats if you own the whole thing. When you own one unit? If that vacancy is yours....
     
    Last edited: 26th Oct, 2019
    Beano likes this.
  13. jim1964

    jim1964 1941

    Joined:
    18th Jun, 2015
    Posts:
    1,214
    Location:
    Adelaide S.A.
    This was a decade ago, i cant remember things from this morning. :)
     
    Scott No Mates likes this.
  14. Cousinit

    Cousinit Well-Known Member

    Joined:
    6th Aug, 2017
    Posts:
    86
    Location:
    Victoria
    One thing I do know is there is very strong demand for storage where I live here is Western Victoria. An agent friend of mine gets calls every week from people wanting somewhere to put their stuff.
     
  15. Momentum

    Momentum Well-Known Member

    Joined:
    19th Aug, 2015
    Posts:
    398
    Location:
    Collins Street, Melbourne
    If anyone wants to invest in developing a storage unit complex on the Gold Coast send me a message.
     
  16. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    3,441
    Location:
    Mt Druuiitt
    Thanks for the offer Mome.

    I have used storage units for a good 10 years and I did a lot of talking with the managers. The feed back I got is that they are a cash cow. One manager I spoke to reckons the storage side of the business is far more lucrative than than the other side which is involved in the hire of tools, machinery etc AND far less paper work.

    I have done away with the main stream storage unit companies and now just rent privately a 2.7m x 6m lock up garage in a home unit complex. Much much cheaper. Ony issue is some dhead occasionally parks in front of the door.
     
  17. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    4,779
    Location:
    ..Sunny Qld...
    You sure it's not the owner looking for rent by mistake?.
     
  18. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    3,441
    Location:
    Mt Druuiitt
    Positive. The owner doesn't drive.

    It belongs to a resident in the complex who is too lazy to use their garage or park in the street (where their car becomes fair game for datto's fob relay attack device aka dafrad, trade mark pending).
     
    willair likes this.
  19. Luke T

    Luke T Well-Known Member Premium Member

    Joined:
    12th Dec, 2015
    Posts:
    337
    Location:
    Straya
    I know a lot of people do really great out of them definitely due to the return on m2. I just bought a small commercial unit OTP on central coast which you could use for storage but it is sold as a full com unit so many more options than just storage. Many people are selling them as small m2 these days so it opens the door for more people-a great idea I reckon .