Are Storage Units a Waste of Money

Are Storage Units a Waste of Money?

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In the past few months, I’ve helped my sister and two friends clean out their storage units. They’ve been storing furniture and boxes of stuff for months. They had good reason to pay the storage unit fee because they were transitioning from one house to another.

My sister sold her 3-bedroom townhome to move to her one-bedroom rental property as they waited on closing and renovating a 4-bedroom 2-bath house. That process has engulfed an entire year. On the other hand, my best friend who transitioned from military life to civilian had his stuff stored for 6 months as he got settled in his new job and found a home. The difference between my sister and my best friend is that the military paid for the storage unit fees while my sister forked over rent equivalent to a small studio apartment in Jersey.

Helping my family and friend clean out their storage units reminded me of the time I had my own. I once used a 5×5 storage unit to store furniture and things while I moved from my brother’s old house into an apartment. Although my reason for storing stuff was similar, I ended up not using 90% of the items I stored.

What’s the cost of a storage unit?

A move.org survey revealed that “storage units cost approximately $190 per month. We asked seven self-storage companies for more than 2,500 quotes and found that monthly prices range from about $90 for a small storage unit to nearly $300 for a large one.”

In 2019, the Self Storage Association estimated that the Storage Unit Industry generated more than $39.5 billion dollars in revenues. Approximately 10.85 million households in America pay for a storage unit that averages $115/month for a 10×10 plot of space. The study showed that 22% of people keep a storage unit for 1-2 years, so on average, a person can expect to pay $2,760 for 24 months of use. If you need indoor or climate-controlled units you that price will rise further.

How about the one month free storage promotions

You might see advertisements for free months, but the industry knows once a customer is locked in a unit they’re more than likely going to keep it longer than intended. I remember taking advantage of the promotion that included a free month. I said to myself the unit was temporary and wouldn’t last for more than 30 days.

Aha! I was going to work the system and store my stuff for free during the transition. However, when I moved into my new living space I wanted to have new furniture for the new bachelor pad and after months of not seeing the stuff I owned, I actually forgot what I had stored. I finally decided to clean, close, and sell the items on Craigslist. With everything all said and done, it took six months to close the unit.

My storage unit fee was $35 per month for some idle furniture. Yikes! I paid $210 to store my $200 Ikea bedroom set. The intention and plan were actually really good, but the execution was financially horrible. I didn’t account for the effect of “out of sight, out of mind” coupled with my incessant need to buy new things and general laziness to drive to the storage unit location.

What alternative way could I have used $210? Well on June 7, 2013, the price of a Facebook share was $23.29 I could have bought around 9 shares that would be valued today at $3.326. A gain of $3,116 for “storing” my money in the stock market instead.

The mentality around stashing in storage units

A reader shared that he uses a storage unit to store collectible items and keep his home clutter-free. He’s a big Jets fanatic and buying sports memorabilia is his hobby. He was actually considering getting another storage unit. After a lengthy discussion, he finally admitted he hasn’t been to his storage unit in over three months, all the while amassing more and more sports memorabilia. He was continuously buying more collectibles because as he moved items into storage he felt the home needed more green. Instead of sifting through his storage unit, he’d buy more to fill the gap, then he’d pack them up in boxes to store and the cycle continues.

When I started researching the industry I came up with my own anticipatory profile of the typical storage renter: lived in urban areas, rented apartments, modest means. This wasn’t entirely true. In fact, our reader is a suburbanite homeowner of a 2 bedroom 1.5 condo in an upper-middle-income town.

The reality is that there are millions of people from every class and walk of life that use storage units, and the data did surprise me a bit.

The Self Storage Association statistics showed that:

  • 52% of self storage locations are in suburban areas
  • 68% of all self storage renters live in single family households
  • 65% of all self storage renters have garages but still rent; 47% have an attic and 33% a basement
  • 63% of renters have incomes between $50,000-$75,000 per year

We are emotionally attached to stuff. So paying to store them seems like a small fee to pay. Those fees however add up over time and the reasons we use storage units can often be forgotten.

Why storage units are a bad idea for your money

In a GoBankingRates article, Jennifer Calonia explains reasons people justify paying for a storage unit range from love affairs with old collections to temporary housing arrangements. A major factor in why it’s just a terrible idea is that laziness plays a role. No one wants to spend a day moving boxes, sorting through stuff, and cleaning. It’s so much easier to keep the stuff in storage pay the fee as a convenience.

Keep in mind when you’re storing items you don’t need, they tend to depreciate in value to the point of trash. And if you don’t claim or forget to pay it’ll end up as someone’s junk to clear or sell. So, that begs the question, you can sell your stuff at online marketplaces and make cash as opposed to spending cash to store it.

So I need to ask, “What are you doing with all that stuff?” Since living a more minimalist lifestyle I’ve discovered how more stuff equated to more time thinking about the stuff. Okay, in this case forgetting about my stuff but still being tied to it. There are valid reasons to have a storage unit but in many cases, those reasons are closer to excuses. We’re just paying to store items we don’t actually need or want.

Get rid of your storage unit. What you can do:

  • Create a spreadsheet of the things you have stored. This will help you identify the items you may need in the future or items you can sell today.
  • Sell your stuff. This could lead to closing off the unit or downsizing to save dollars.
  • Store at a family or friend’s house. Consider asking family and friends to store items temporarily in their garages or attics with specified timeframe for removal. Having your stuff sit in a family or friend’s home may be the right situation to get you to use, move, or sell your unwanted items sooner.
  • Get out now. Start saving some dollars and take the weekend to go through your storage unit.

If you’re one of the 11 million households that have a storage unit, consider the alternatives and calculate how much you could be saving and investing towards a better financial tomorrow.

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