Self Storage – A Terrible Mistake
Americans own more stuff now than ever before in the entire history of this nation. Home sizes have doubled over the past fifty years. In spite of the increase in home size, about one in ten American households rents an external self storage to store things. Here are some key points I extracted from Self Storage Association’s (a non-profit trade organization) 2015-2016 fact sheet:
- The self storage industry in the United States generated $27.2 Billion in annual U.S. revenues (2014). The industry has been the fastest growing segment of the commercial real estate industry over the last 40 years and has been considered by Wall Street analysts to be “recession resistant” based on its performance since the economic recession of September, 2008. The industry pays more than $3.25 billion each year in local and state property taxes.
Occupancy rates for self storage facilities as of Q2 2015 were 90% (percentage of units rented per facility) up from 86.8% at year-end 2013.
- In fact, about 9.5% of all American households currently rent a self storage unit (10.85 million of the 113.3 million US HHs in 2013; that has increased from 1 in 17 US HHs (6%) in 1995 (20 years ago).
- There are approximately 60,000 self storage facilities worldwide as of Q2 – 2015; there are more than 3,000 in Canada and more than 1,000 in Australia.
Just think about it for a minute. Seriously? With a bigger home, does it make any sense to put things in storage for an extended period of time? I don’t think so. As I have said before, everything you own needs to be maintained including your home. The more you own, the more you have to pay with your time and money to maintain it.
I would like to share my personal story. I used to live in a 3700 sq ft. home in the south and was relocating to the north east for work. I had to down size from a ~3700 sq ft. to a ~1600 sq ft. home.
To be honest, when I was living in the 3700 sq ft home, our family effectively used about 1200 sq ft. We hardly used the extra space. Now getting back to my story, I was considering to put all my extra furniture and stuff that were part of my home into a long term storage.
When I was looking at storage costs, it was coming to about $150 per month. That adds up to $1800 per year for self storage. The obvious truth is things that are not used rot and lose value and I would be paying dearly to hold on to stuff I will probably never use again. I thought to myself – “this is nuts!”
Then I made a resolution – “I am not paying a penny for storage.”
Here are a few things I did to work around self storage:
- Donated things / furniture
- Sold some things / furniture
- Parked some furniture with family, it was symbiotic and it worked out. They needed it, I had to put it somewhere and it worked out. They are happy and I am happy.
- Moved whatever I needed and would fit to my new home.
My goal was accomplished. I didn’t spend a dime on self storage!
I understand that there are always special circumstances in life when you might need to use external self storage for a short duration of one to three months. Other than that, putting things in external storage for extended periods of time is a total waste of your hard earned money.
If you use self storage, I strongly encourage you to do away with it and save some money. You can live a much richer life with less things!