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Subject:  Re: Self Storage as an Investment Date:  5/15/2003  10:50 AM
Author:  golfwaymore Number:  107225 of 888207

Euro writes,

That's why I'm especially interested in hearing from you on the topic. Who else is in business in your area? What does it take to differentiate yourself from other mom-n-pop operations in SS? Do any ot the major REITs compete there with the private owners?

I'm probably wrong, but my impression is that this is one area where you could quickly go from being a business with nice math (as you've illustrated) to one with bad math
due to margin contraction as a result of overbuilding at some stage, and lack of differentiation from your competitors.

Good questions, to be sure.

The outfits that I would call competitors are privately, or family owned.

As for differentiation between myself and the "mom/pops", it's really as simple as being and looking organzied, with a phone number, and fencing, and security gates, a "you know it when you see it" kinda thing.

There are no REITs competing in my area, though I believe a couple have entered the Atlanta market. I am not aware of any REITs that compete in rural areas, but it wouldnt surprise me if one came along. I do know that if a REIT does enter this area, they likely dont want to be across the street from my complex, any more than I want to be across from them.

My estimation is that there is alot of room in my area for competiton and it will most certainly come, sooner or later.

And regarding the math could go bad in a hurry, there is certainly that risk, as with any investment. At the current return rate, if the "good times" last 3 years, no matter what happens I'll have broken even.

With any luck, the math wont go bad any faster than it did on my EMC or YHOO. <grin>


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