Is Owning a Self Storage Business Profitable?
- Nate Jones, CPCU, ARM, CLCS, AU
- Nov 13
- 2 min read
The self storage industry has grown rapidly over the past decade, driven by urbanization, downsizing, and the rise of e-commerce. Many entrepreneurs are asking: Is owning a self storage business truly profitable? The short answer is yes—but profitability depends on factors like location, management, and operational costs. Let’s break it down.
Why Self Storage Businesses Are Attractive
Self storage facilities offer recurring revenue, relatively low maintenance, and scalability. Unlike retail or hospitality, storage units don’t require constant staffing or inventory management. This makes them appealing for investors looking for passive income streams.
Key Factors That Impact Profitability
1. Location and Demand
Profitability starts with location. High-demand areas with limited storage options can yield strong occupancy rates and premium pricing. Urban centers, college towns, and growing suburbs are prime markets.
Initial investment includes:
Land purchase or lease
Construction or renovation
Security systems
Insurance premiums
Operating costs are relatively low but include utilities, maintenance, and marketing. A well-managed facility can achieve profit margins of 30–40% once stabilized.
3. Occupancy Rates
Most facilities aim for 85–90% occupancy to maximize profitability. Seasonal fluctuations can occur, so marketing and customer retention strategies are essential.
4. Insurance and Risk Management
Insurance is critical for protecting your investment and ensuring long-term profitability. At Wexford Insurance, we specialize in self storage business insurance programs, including:
5. Revenue Streams
Beyond unit rentals, consider:
Selling packing supplies
Offering truck rentals
Providing climate-controlled units
These add-ons can significantly boost revenue.
Average Profit Potential
According to industry reports, a well-located and efficiently managed self storage facility can generate $350,000–$1 million annually, depending on size and occupancy. ROI typically improves after the first 2–3 years as the business stabilizes.
Final Thoughts
Owning a self storage business can be highly profitable if you choose the right location, manage costs, and maintain strong occupancy rates. Protecting your investment with specialized insurance is essential for long-term success. Wexford Insurance works with top carriers to provide tailored coverage for self storage facilities. Contact us today for a quote and secure your business.
Contact us today.
