Anyone who’s moved homes knows the feeling of having too much stuff.
And it’s not helped by the fact that most of the time, it’s a decent trek to the nearest self-storage facility.
Spacer is an Australian startup by Mike Rosenbaum and Roland Tam which is tackling the high-costs and inaccessibility of traditional self-storage spaces by letting people rent out under-utilised spaces. In other words, an extra parking space, garage, backyard or shed.
These are spaces which we tend to be overlooked but are actually a handy source of passive income when put to use. Rosenbaum, who also co-founded e-commerce deals site Deals Direct, says he came up with the idea after travelling to Silicon Valley and falling in love with the sharing economy.
“So I was looking for something that I could bring back to Australia in the sharing economy and obviously Airbnb and Uber had done extremely well and I could see that the next wave of growth for the consumer was with the sharing economy. And I sort of saw it as the next evolution of e-commerce.”
In his previous work in startups, Rosenbaum said that he had come across self-storage services when he had to move from his bedroom to a small office and from a self-storage facility to a warehouse.
“I was familiar with the challenges of that model and the expense and the inconvenience and I thought: ‘There’s so much space all around us, in and around peoples’ homes, things like garages and also there’s lots of empty warehouses and offices and things like that that could be divvied up and used for storage as well.”
He researched the market and found that traditional self-storage was around a billion-dollar market in Australia, with the untapped market close to $5 billion including the peer-to-peer market.
“There’s a mixture of macro conditions — you know we’re all moving into smaller living spaces generally, it’s the global trend. Certainly in Australia we’ve seen that more and more people are moving into smaller homes, smaller apartments and they need more space. So the biggest problem is where do you want to store your stuff?
“Because often people have more stuff than they have space in their home to keep. And that could be furniture, keepsakes, family heirlooms. It can be sporting equipment, recreational things like boats, caravans, weekender cars, things like that.
“There is space around us, it’s just not used, it’s not evenly distributed.”
“And that’s what I love about the sharing economy — it connects people who have, in this case, space to people who need space. That’s really the problem we are trying to solve and we’ve seen that it’s a real problem. It’s something we’re helping solve and helping people on one hand, make money and on the other hand save money.”
With this in mind, Rosenbaum launched Spacer in October 2015 with an initial seed capital of $1.2 million. Back then, the services were only available in Sydney with Rosenbaum noting that getting initial traction was extremely difficult in the few months since they didn’t have enough supply for demand.
Since then, Spacer been rolled out to every major capital city in Australia and helping people to capitalise on untapped spaces as a second stream of income whilst lowering the costs of self-storage.
“That’s the benefit of marketplaces, once you get that traction, you’ve got really good momentum. But it is hard work, costs a lot of money and it’s a lot of patience and a lot of trial and error,” says Rosenbaum.
He says that so far, garages are “very much our commodity or our currency” .
“Typically what we are finding the most popular are garages. And I guess the reason for that is that they are relatively self-contained, they’re separate to your house, they have a lock and key so people can come and go as they please.
“It doesn’t invade your personal space, your private home space. And they’re quite large spaces, they can be used for a number of different needs whether it’s furniture, people moving house, if people are renovating and need somewhere to store their stuff.
“Also we’ve seen things like storage cages in apartment buildings are very popular as well, so smaller storage needs. Again, typically outside your home. Yard spaces are popular too and driveways, for parking so cars, boats and caravans again.”
Rosenbaum said the average garage rent was $250 a month for a single sized garage in the suburbs in Sydney, Melbourne or Brisbane.
“For the same type of space, you’re looking at least double that in a traditional self-storage facility, so $500-$700,” he said, “so there’s a real cost saving.”
Rosenbaum says that it’s not just the different price points that sets Spacer apart from traditional self-storage spaces but also the convenience of being able to access your belongings in the same neighbourhood.
“You know we’re all becoming time poor, there’s so much traffic so people don’t want to travel five kilometres or 10 kilometres to their nearest self-storage facility. They really want to have their things where they can access them, maybe want they want to grab their bike or their golf clubs on the weekend from their storage or their boat.”
The web app itself is also very easy to navigate for both hosts and renters. Hosts can disclose the level of security they’re providing whether it be full access such as lock and key so renters can come and go as they please, or partial access meaning people have to notify the host before they come.
Spacer looks after the cost of lifting and basically makes money through the transactions by taking a 15% cut.
So far the biggest users of the service have been empty nesters. Most of them have two garages or have an extra parking space since they don’t have a car anymore.
Recently, commercial property owners have also begun listing warehouses that have been empty for some time while they look for a longer-term tenant to take the whole building.
In the long run, Spacer hopes to be a global marketplace of space and has already set its sights on Asia including Singapore, Hong Kong, and Tokyo where space is an even bigger issue due to high density.
“Down the track we certainly have a vision to be a marketplace of space and that will extend beyond storage,” Rosenbaum said.
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