By Fabian Sobak
Standardized shipping containers have been used for storage purposes since the early 1950s when the first vessels were built. They soon became popular for storing equipment on construction sites as well as for temporary event storage. Today, they’re widely used for various purposes, and they offer a great opportunity for self-storage operators to establish or expand a business without the hassle of construction. Here are some advantages to this strategy.
Movable and Flexible
Storage facilities with vacant land can easily add shipping containers, and you can add units according to demand. You can place them on areas of the property that are too narrow to support a building. Containers can also be moved if you need to change the layout of the site or construct a new building. They’re built for transporting goods, so you can even move them with customers’ belongings inside.
Low Investment and Maintenance
The main advantage to shipping containers is the low cost. Compared to the alternatives, they’re significantly cheaper—even over purpose-built portable-storage units. Unlike traditional storage buildings that require a considerable upfront investment, you can buy containers as you need them. This will ensure increased liquidity and more opportunities to invest in your existing or new property.
Also, shipping containers require minimal maintenance. Their life expectancy is two to three decades.
Watertight
Shipping containers are purpose-built for transporting goods on the open sea and ensuring they’re safe and dry during the journey. When the doors are closed, the units are watertight, enabling the storage of most types of items. You’ll be surprised how suitable they are for storing a variety of things, from boxes to furniture.
Resale Value
Standardized shipping containers are basically considered a commodity, even though their price is more stable than that of items such as coffee, gold or oil. The advantage of a commodity is it’s extremely negotiable. If you decide to sell the containers, it’ll be a lot easier than selling purpose-built portable-storage units. A recent trend is to use these containers in environmentally friendly construction. This will likely drive demand for them in the future.
If you decide to buy shipping containers for your self-storage site, it may be tempting to choose used ones, which are obviously cheaper than new. This is a mistake. With an older container, you probably can’t charge the same rent as you could with a new one. New containers will remain in great condition for decades. Their value remains pretty healthy, and they’re easier to sell.
Financing
Shipping containers also come with more finance opportunities. With their negotiable nature, they present a lower risk for lenders and better terms for you. The greatest risk in self-storage is site selection. With containers being movable and easy to sell, this risk is largely eliminated.
Talk to companies that specialize in container leasing and financing. They know the product well and will frequently offer better terms than your local bank. Lease-to-own is common in this marketplace, with zero equity required in some instances.
The use of shipping containers won’t be ideal for every storage operator or property. However, if you’re looking to grow your business or even start a new one, they’re definitely worth your consideration.
Fabian Sobak is the co-founder and owner of OK Minilager AS, a self-storage company based in Oslo, Norway. The business was founded in 2009 and specializes in containerized storage. It has more than 40 sites comprising more than 2,500 units and is the second largest self-storage operator in the country based on revenue. For more information, visit www.ok-minilager.no.
