CommonCentsMom.com is advertiser-supported: we may earn compensation from the products and offers mentioned in this article. However, any expressed opinions are our own and aren't influenced by compensation. The contents of the CommonCentsMom.com website, such as text, graphics, images, and other material contained on this site (“Content”) are for informational purposes only. The Content is not intended to be a substitute for professional financial or legal advice. Always seek the advice of your Financial Advisor, CPA and Lawyer with any questions you may have regarding your situation. Never disregard professional advice or delay in seeking it because of something you have read on this website!
You've probably seen the commercials on TV and heard the radio ads.
You might even have gotten a call from someone claiming to be from a storage company or rental service, but did you know that many of these companies rent storage units for $12-50 per month?
If you're thinking about getting in on the ground floor of this fast-growing industry, here are some important things to know before you make any financial commitments.
Storage units are not always cheap
It's easy to see how companies can get away with advertising the rates they charge, but if you're not careful, you could find yourself stuck with a storage unit that costs more than you bargained for.
Many of the facilities renting out storage space are small and unprofitable, and they often don't offer the best security or maintenance.
The bottom line is that your unit could be filled with old furniture and other junk, which will cost you money in the long run if it's not removed.
You need a license
If you plan to rent out a storage unit in California, you must have a state license to do so. It's best to look for a storage facility that is part of a national chain.
These companies have strong relationships with the state and often have licensing agreements with the local police departments.
Security measures are important
While the facilities that offer these cheap rates might not be well maintained, they will still be staffed with security guards who will make sure your property is secure and safe.
If your unit is being rented out, you'll also want to ensure that your neighbors don't suffer from any vandalism or break-ins while you're away.
Get a good tenant screening service
You should also consider getting an expert tenant screening service, such as Thumbtack, to help you choose tenants for your storage facility before you list it for rent on Craigslist or any other classified ads site.
By taking steps like this, you'll be able to screen out those who may not be the best candidates for this type of work and save yourself from any potential problems down the road.
Protect yourself financially by listing it as an LLC
If you plan to rent out a storage unit, you should also take the extra step of setting up an LLC for your business. This is a legal entity that protects your assets from being attached if your business goes under.
There are also many financial benefits to having an LLC for your storage business. By setting it up as a corporation, you'll have to pay tax on the money you earn and have all of your paperwork in order.
Renting out old furniture is not as easy as it sounds
There are indeed a lot of people looking to rent out storage space, but there's also a lot of competition.
Many people who want to get into the storage industry are very competitive and can easily charge more than you'd expect.
If you plan on renting out storage space, you'll want to make sure that your unit is not full of furniture or other items that will take up valuable space.