I joined as a customer of the self-storage industry about 4 years ago when I downsized from a 3500 square foot house to a 1350 square foot apartment. The kids had moved away for college and their first jobs. I just couldn’t walk past their empty rooms one more time; and besides, why did Sara and I need all this space?
We sold the house and threw out tons of stuff we were embarrassed we had saved all these years. But there were certain things we couldn’t yet part with: my teak office furniture, a dining room table, things from Sara’s dad and memories of all kind.
So we did what a lot of Americans do; we rented a storage unit to pay to put our stuff in.
Unbelievably, 10% of Americans pay $38B to store items that they can’t fit into their current home (but want to keep it any ways.) There are more self-storage units in the country that McDonalds and Starbucks combined.
I have always thought that the self-storage industry is the perfect business because once you get a customer, literally it’s nearly impossible for them to leave.
They provide a first month free incentive and a van so people can easily move in. But despite the fact that every 8-12 months, they raise the monthly rate 10-20%, few people leave.
This is because they can’t face the idea of throwing out things they may want. They can’t face the emotional challenge of making those choices.
In addition, they make it hard to move out. If you want to leave, you need to hire a truck to do it. Appropriately, there are no garbage bins at in the storage industry so you need to take everything with you.
I have a love – hate relationship with the self-storage industry. As a business, I admire it. As a consumer, I feel helpless by its power over me.
I always tell people that we buy when we are in pain. The self-storage business is perfect because the pain they solve is that we can’t be separated from the stuff that we love and have invested in. Therefore, we will pay, $50- $200 a month to store it for us so we don’t have to decide.
The self-storage industry is booming. This is as a result of residential downsizing and more affordable housing across the country. We are living in smaller spaces, but don’t want to give up our stuff. It is also resistant to economic cycles. When things are booming, people buy so much stuff they can’t keep in their homes. When recession hits, they move to smaller spaces and need to store their stuff until the next upturn. In fact, many real estate investors are starting to turn to self-storage unit since they are simpler to manage.
Do you use self storage? Do you know anyone who has ever moved out of a unit?
