No. of Recommendations: 18
Excellent post, Golfwaymore. Thanks for making the effort.

While you provide a good introduction to the self storage business, perhaps even more importantly you show the mind of a businessman at work, assessing what is worthwhile and what is not. That is of particular value to anyone contemplating starting a business, in my view.

My most serious criticism is that you haven't assessed the risk of over expansion of the service you offer. The ease with which you estimate the revenues you might expect to receive, and analyze your competition can be done by others. A major risk of any kind of real estate investing is that you are building for the long term, but the attractive returns you are experiencing should be EXPECTED to cause others to enter the business, probably glutting the supply and bidding down rents and increasing vacancies. Competetors might install more bells and whistles such as full time staff, paved parking lots, increased security and so forth. This might sharply cut into your ability to fill vacancies and raise your expenses significantly if you try to match them.

Indeed, your major competetor probably cannibalized the competition when he opened up, and while you met the level of service your competetor provided, you didn't feel a need to significantly exceed it. New competetors might do just that.

This lack of assessing the impact of new suppliers of your service is the major weakness of your study that I see. I'd be interested in your comments.

Again, excellent post. Thanks for insights on how you assess a business opportunity.

Seattle Pioneer
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