If a good investor spots a big open space near an industrial area, they immediately see an opportunity to invest in an industrial outdoor storage facility. Finding a large open space ideal for outdoor storage is no easy task, and even if you do, there are various other factors to consider before you invest.
Industrial outdoor storage (IOS) is a large open space between three and twenty acres to house industrial equipment, containers, other large items, etc. The location, regulations, permits, and consumer demands are a few of the factors to consider before investing.
Buying and developing the property to start an IOS is costly but requires less maintenance and running costs than standard storage facilities. Outdoor storage facilities are large open spaces, although some provide specialized amenities like security and enclosed buildings. Before investing in an IOS, getting all the information and knowing all the benefits and pitfalls is vital.
What Is Industrial Outdoor Storage?
The demand for storage has boomed in recent years, and many investors consider standard self-storage units while missing an opportunity to start industrial outdoor storage (IOS). IOS is a part of the storage spectrum and caters to the industrial sector, ideal for vehicle and truck parking, containers, industrial equipment, and fleet maintenance.
Industrial outdoor storage requires a large open space with good lighting, fencing, security, and an office building. Some IOS facilities have large warehouses, roof coverings, and open spaces to house large items like trucks, earth-moving equipment, etc. Industrial storage facilities have low running costs, including lighting and security expenses.
How Much Land For Outdoor Storage Facility?
Industrial equipment requires a large storage area, making any open area between three and twenty acres ideal. Due to the large area, most IOS facilities do not have any covering, although some incorporate warehouses for better protection, such as storing planes and buses. Depending on the size of the IOS, warehouses, hangars, small storage units, and office buildings occupy only 25%.
Industrial Outdoor Storage Real Estate
Due to their low operating and maintenance costs, industrial outdoor storage real estate provides good opportunities for investors. IOS investment opportunities do not come along often due to the scarcity of large open land close to the consumer base.
Properties ideal for IOS real estate must be close to factories, industrial areas, ports, railway yards, transportation nodes, and metropolitan areas. Such properties are scares but are extremely profitable due to low running and maintenance costs with a long-term storage contract. Due to the difficulty of moving large equipment, most rental contracts continue for several years.
Outdoor Storage Properties
Before investing in an IOS, you must consider a few factors.
- Location – Most items stored at an IOS require a large space and easy access to maneuver. Vacant land, container yards, parking lots, and fenced yards can be promising prospects, especially if it is close to an industrial area, harbor, railway yard, or airport.
- Demand – Moving industrial equipment and bulk inventory is challenging, and consumers prefer to use a storage site nearby that supplies easy access and good security.
- Infrastructure and Layout – Parking areas, for example, are ideal for storing trucks, buses, and other fleets because the surface with its tarred, cemented, or paved surface, which protects vehicles from overgrown bushes and weeds. Fenced yards prevent theft, especially where inventory items are stored.
- Enclosed Units – Many IOS facilities provide containers, warehouses, and other large buildings ideal for storing parts for industrial equipment and other smaller items kept close by and better protected against the elements and theft.
- Inventory – Some IOS facilities provide added security and inventory personnel when parts or equipment regularly move back and forth to keep track, which requires office space, fencing, and security access. These added functions come at an additional cost to the consumer.
- Specialized IOS – Some outdoor storage facilities provide containers, shelving, hangars for planes, pallet and cantilever racks, and other specialized storage equipment. These storage equipment extras provide added benefits if the property has buildings to support it.
Investing In Outdoor Storage
Investing in outdoor storage real estate can be extremely profitable, but achieving success requires an in-depth and informed approach. A planned strategy driven by a well-executed plan is vital if you want to achieve success, and there are various factors to consider. There is a thriving market for IOS facilities, and a sound investment requires good decision-making and proper research.
Here are five steps to help you identify and navigate through an IOS investment opportunity:
- Market Analyses – Verifying consumer demand is vital and requires proper research to gauge the market. Research the business expansion, population growth, location, and logistics to verify if the demand supports the investment.
- Risk Assessment and Feasibility Studies – It is vital to consider risk factors like environmental liabilities, zoning regulations, and market saturation, which often hinder the feasibility of an IOS. The financial viability of an IOS includes comparing the rental income to other factors like development expenses, acquisition costs, and a profitable exit strategy.
- Zoning Regulations and Permits – Obtaining the necessary permits and following the correct local zoning regulations are essential factors when dealing with an IOS real estate. All industrial outdoor storage facilities must comply with safety and environmental regulations to avoid legal issues and costly delays.
- Professional Assistance – Embarking on an IOS real estate investment requires in-depth research and assistance from a real estate professional, property manager, and an experienced real estate agent. Resourcing professionals will help identify correct values, market conditions, legal advice, and potential pitfalls.
- Location – Distance and accessibility are two big factors about the location and play a vital role in the profit and success of an IOS investment. An IOS close to a high volume of potential consumers is essential to ensure supply and demand.
Conclusion
Industrial outdoor storage real estate provides extremely profitable opportunities to investors willing to do proper research and involve professionals to help facilitate the process. An IOS is ideal for storing industrial equipment, large vehicles like buses, trucks, earth-moving equipment, etc. Large open areas near ports, railways, and industrial areas are perfect to invest in as an IOS facility.