One in 10 families owns more stuff than their home can contain.
Kurt Novak is a real estate investor. And since he's good at what he does, that means he's also the owner of a storage-unit facility. For the past eight years, he's been an owner of Westbelt Storage on Old Roberts Road near Hilliard. He'd like to own more facilities, but storage units are hot. “Right now everything is overvalued,” Novak says. “It's hard to find a good deal.”
Demand is driven by the age of instant consumerism, when goods and trinkets flash before your eyes every time you glance at your phone, and the latest and greatest can be purchased with a couple clicks of a mouse. Americans have more stuff than they can contain—even today, when houses are bigger than ever, there's a need for more space.
About 10 percent of U.S. households rent a storage unit, according to the national Self Storage Association, spending about a buck per square foot, or almost $90 each month to store stuff. It's a little cheaper in Columbus—about 75 cents per square foot. According to industry analyst Union Realtime, there's about 1.6 billion square feet of storage space in the U.S., or 5.4 square feet for every man, woman and child in the country, and occupancy rates of those units are above 90 percent.
And that's still not enough.
A Bloomberg story last June reported that the storage industry set records for construction spending in each of the first six months of 2017. And why not? They're cheap to build and cheap to operate. Bloomberg reported that the largest publicly traded storage operator, Public Storage, booked $538 million in revenue during the first three months of 2017 against $149 million in operating costs. That's a gross profit margin of 72 percent, which Bloomberg reported was more than double that earned by Equity Residential, one of the country's largest apartment landlords.
“Self-storage is probably the safest commercial investment you can make,” says Novak. “Even during the downturn 10 years ago, self-storage was still doing well. It's low-maintenance. As an owner, it's a simple operation compared to, say, apartments.”
Novak says that usually, once someone decides to rent a storage unit, it's rare that they find the space in their homes or businesses to move the stuff back out. “Most keep a unit for years,” Novak says.
Cathi Du Puy of Out of the Closet, a professional organizing business, says that's the problem. She says people usually go into it thinking it's a temporary thing—until a divorce can be sorted out or until their kid graduates and then needs all their extras for their first apartment. But then, “If that monthly rent is not a big budget item for you and your family, you forget about it.”
Novak knows his investment is safe. “People are buying more and more stuff,” he adds. “You've got to put it somewhere. Drive around a subdivision; you see a lot of cars parked in driveways because the garages are full.”***
The Storage Auction
Treasures? Don't get your hopes up.
The 2010 premier of Storage Wars on the A&E network created an instant get-rich-quick frenzy in the storage-unit industry, as auctions began cropping up at storage facilities all over America. Central Ohio wasn't immune to the secondhand fever, in which roving bands of collectors, curiosity-seekers and resale shop owners would gather to bid on the contents of storage units of delinquent owners.
Though it was based on a reality TV show, in reality the riches were scarce. Sure, there might be an occasional find, but when pressed, even the Storage Wars producers admitted that the vast majority of foreclosed units contained nothing worthy of including on a cable television show. In fact, the show was sued at one point for planting valuable items in the units to create artificial interest.
“During the show's heyday, storage auctions were really popular,” says Kurt Novak, owner of Westbelt Storage near Hilliard. “People were thinking they could make a quick buck, and everyone was calling me to find out if we did auctions. Honestly, we didn't do a lot. We usually tried to work something out with the tenant. The truth is, there's usually just a lot of junk in them if they're left behind.”
Novak says his phone has stopped ringing these days, as most storage-unit auctions now take place online. A manager at Simply Storage in Reynoldsburg, who declines to give her name, says online auctions have two big advantages: You don't pay for an auctioneer, and there's no liability for having all those potential bidders wandering around on your property.
At the auction's appointed time, a general listing of some of the items inside the unit, as well as photos, will be posted to websites like storagetreasures.com and storageauctions.com. In a couple of recent online auctions for units at Storage Express on Chatterton Road in Southeast Columbus, one 10-by-10 unit included a lawn mower, power tools and a loveseat and ottoman. It drew 13 bids and sold for $110. Another 10-by-15 unit included a refrigerator, washing machine, microwave, locked safe and a curio cabinet and corner cabinet. It drew 36 bids and sold for $380. Since the buyers are not identified publicly, there's no telling whether the winners got their money's worth, much less any treasure.