Targeting smaller markets offers distinct advantages:

• Less competition: Unlike larger cities where big players dominate the market, smaller towns often lack sophisticated operators. This means rental rates tend to remain stable and, in some cases, are even higher than in more populated areas.

• Untapped potential: These markets are typically underbuilt, providing plenty of room for growth. With fewer storage facilities, the demand for storage units often exceeds supply, creating an opportunity for strong returns.

The Catch: Limited Population Growth

While smaller markets offer stability, they can also get crowded fast. In a town of 20,000 people, even a 10% population increase over five years only adds about 2,000 new residents. Compared to larger cities, where population growth can add tens of thousands of new residents, the overall growth in smaller towns is much smaller in absolute numbers.

Because of this limited growth potential, even one new storage development could easily oversaturate the market, reducing demand and driving down rental rates. To navigate this risk, Container HQ employs a flexible business model that adapts to changing market conditions.

Managing Risk with Portable Units

Instead of committing to building permanent structures, Container HQ opts for portable storage units in smaller markets. This provides several key advantages:

• Flexibility: Portable units allow us to expand or shrink the facility based on market demand. If the local economy thrives and demand for storage grows, we can add more units. If the market becomes oversaturated or demand falls, we can reduce the number of units without losing a significant investment.

• Lower risk: By using portable units, we’re not locked into a long-term commitment with expensive, permanent structures. If the market shifts unfavorably, we have the option to sell the portable units and return the land to its original state, reducing our financial exposure.

This approach allows Container HQ to explore smaller, high-potential markets while keeping risk manageable. The flexibility to respond to market conditions is key in ensuring that we don’t get caught in a saturated market with too much inventory and not enough demand.

Flexibility is Key in Smaller Markets

While smaller markets under 20,000 people offer attractive opportunities due to less competition and stable rental rates, they come with the risk of rapid market saturation. Container HQ manages this risk by utilizing portable storage units, offering the flexibility to adapt to changing market conditions. This strategy allows us to take advantage of the stability and potential in these smaller markets without committing to long-term, high-risk projects.

Interested in learning how Container HQ uses portable units to manage risk in smaller markets? Contact us today to explore how our flexible solutions can help you expand into untapped areas.