Tidying During the Pandemic? Go Clear Out That Storage Space
That $200 monthly fee could become $40,000+ at retirement
Nine months into COVID, if you’re the tidying sort, you’ve probably purged every closet in the house and rearranged every shelf . . . multiple times.
Don’t stop there: Go empty out the storage space and make your tidying profitable.
If you have a self-storage unit, right now seems an especially smart time to tackle that project. You’ve likely got some free time, and combing through your storage unit can be done at a socially safe distance.
Sure, a self-storage unit can be a sound move if you are in flux for a few months — a move, or summer break from college (pre-COVID at least). But many of us stash belongings in there, thinking they’re essential, and put the monthly fee on automatic pay and, years later, can’t remember what’s in the unit.
Sound familiar? A $200-a-month storage fee, redirected to savings for five years and left there to compound for 25 years, at a 5% rate of return, would leave you with more than $40,000. Anything in the unit worth $40,000?
Some COVID-driven considerations:
Assess what you’re holding on to. If you didn’t create a detailed inventory when you put stuff into your unit, you might be surprised to see exactly what you’re paying to store. The passage of time can make it easier to clearly assess what you really want (need) to hold on to.
Assume the kids will want it one day? A recent survey by StorageCafe found nearly 80% of users were between the ages of 35 and 71. If you put a bunch of stuff in storage because you figured someone in the family — your soon to be adult children, most likely — might want it, time to check in with them. It makes no sense to pay for storage for something that isn’t their style. You can snap photos of everything you’re holding on to and then ask them if they’re interested.
Downsizing your home? Resist self-storage. Take a deep breath and make the hard choices before you move. Remove storage as a long-term option, and focus on what goes with you into your new home, and what gets sold or donated.
Consider the power of donating what you’ve got stowed away. This year, more than ever, there are many more households deeply in need. Any chance some (or all) of the stuff sitting in your storage unit could be helping a family right now?
Can’t entirely give up the storage habit? Challenge yourself to purge enough so you downshift from a 10x10 foot unit to a 10x5 or a 5x5. Reducing your rent by $50 a month adds up to $600 for the year. An alarming number of American households say they don’t have $400 to cover an unexpected expense. In just one year of downsizing your storage costs, you could “find” more than that to store in an emergency savings fund.
Negotiate lower rent. Yardi Matrix, a firm that tracks the self-storage business, reported that in May, year-over-year rents for a 10x10 non-climate controlled unit were down more than 4% on average, and climate-controlled units the same size were off nearly 7%. That’s just the average. In Minneapolis-St. Paul, Charleston, S.C., Washington D.C., San Jose, Atlanta, Tampa and Sacramento, rents for 10x10 climate controlled units were down more than 10%.
Yardi Matrix notes that the number of new units under construction, or planned, is rising — up 9% in the 12 months through May — which suggests there’s going to be an even bigger supply-demand gap as the economy continues to struggle to get back to its pre-COVID level. That’s more negotiation leverage.