How Much Can You Make With Luxury Storage?
The truth about making $$$
Welcome back to Unfollow the Herd! If you’re new here, join 4,850+ subscribers learning actionable ways to build their wealth with real estate.
I've owned all kinds of real estate — 8-plexes, duplexes, 24-unit apartment complexes, even an Airbnb in Scottsdale. But after 15 years in real estate and construction, I've learned something surprising:
Boring makes the most money.
These days, I'm laser-focused on luxury storage. Not because it's flashy or exciting, but because it flat-out performs better than any other asset class I've owned — in both good times and bad.
Here’s why luxury storage is crushing it right now:
The Market Opportunity
Since 2020, we've seen 5-6 million new businesses created every year in the US. That's way up from the typical 3.5-4 million pre-COVID. More people want to work for themselves, start their own businesses, and control their time.
A lot of these new business owners have equipment or inventory. But they all face similar problems:
Commercial retail space is too expensive.
Traditional self-storage units are too small.
Industrial flex space requires long-term leases.
That's where luxury storage comes in.
The Luxury Storage Differentiators
Our units are typically around 1,000 square feet — big enough for actual business operations. They're climate-controlled, with basic amenities like lights and power. No bathrooms or retail frontage, just clean, functional space.
The key difference? Flexibility. We offer 30-day leases just like self-storage, not the 1-5 year commitments required for industrial space. Business owners can expand or contract as needed.
The Numbers Behind Luxury Storage
Let's talk revenue. A typical luxury storage unit rents for $500-1,500 monthly. For an institutional-quality facility, we target minimum monthly revenue around $50,000.
Operating expenses run about 31-35% of revenue — covering utilities, maintenance, insurance, and property taxes.
Here's where it gets interesting: Luxury storage generally produces higher cap rates (7-8%) compared to multifamily (6-6.5%). This means we can handle today's higher interest rates without going into negative cash flow.
A Real Example
We're currently building a $9.7 million luxury storage facility in South Dakota. We secured $7.2 million in debt financing and raised $2.5 million from investors. The facility will offer over 109,000 square feet of luxury storage space.
Our Location Strategy
We're not building these in urban cores. Our sweet spot is growing suburban markets where:
Land is available
Small businesses are expanding
There's high visibility and the area is accessible
The minimum viable project should generate at least $50,000 in monthly revenue. This typically requires 5-10 acres to build at a scale that attracts institutional buyers upon exit.
Quality Matters
This isn't your grandfather's storage facility. We create high-end environments with:
Gated security.
Professional landscaping.
Clean, modern aesthetics.
Want to Get Into Luxury Storage?
We're partnering with investors across the US to bring luxury storage to new markets. If you're interested in developing luxury storage in your area — or if you’re interested in passively investing — send me a message on LinkedIn. We can't be everywhere at once, but we're looking for strategic partners who understand their local markets.
This asset class has outperformed everything else in my portfolio. In a market where traditional real estate investments are struggling with high interest rates and compressed margins, luxury storage continues to deliver solid returns.