Did you know that the Self-Storage industry generates $39.5 billion annually and is climbing steadily upwards? It is no secret that real estate is an excellent investment, but have you considered the passive income of self-storage investing?
Continue reading to learn if it is the right option for you!
Why Invest in Self-Storage?
There are multiple reasons why self-storage is an appealing business venture for many investors. First, storage solutions are ideal for urban communities looking to store various items that do not fit their townhouses and condominiums. Second, since COVID, the industry has provided many opportunities for self-storage investors due to downsizing and struggling businesses.
Most storage facilities require minimum electricity and no plumbing. This makes start-up costs significantly lower than other real estate opportunities. Additionally, the maintenance costs are much lower than the average real estate business.
The overhead expenses of maintaining a self-storage facility are relatively low. Most facilities, depending on the size, need only part-time management.
There is a high demand for storage options, and the industry will likely grow in the next ten years. The overhead costs are low, and the potential income is relatively high.
Different Types of Investments
You might be wondering what the best self-storage investing opportunity is. Investors can choose to start fresh and build a new facility. Alternatively, you can choose to buy an existing self-storage facility.
A Start-Up Facility
Starting and developing a new facility can bring a great return over time. However, the initial costs and labor is high, plus, you will need to hire experts in the fields to walk you through the process and logistics.
An Existing Facility
An alternative investment is purchasing a running self-storage. After researching the market, you might find different opportunities that will benefit you in various ways.
There are several classes of facilities, and they each come with drawbacks and benefits. A Class A facility is a more expensive investment, but you can trust that the facility is top-notch and generating excellent revenue.
Class B and C will need improvement and are not performing to generate ideal revenue. These classes are a great compromise between purchasing a Class A facility and a start-up facility. You will need to make improvements and market the improved services and products.
Quick Investing Tips
As mentioned previously, a Class A facility will be the most manageable investment with the quickest return. A well-run facility needs to meet the proper criteria to generate the best revenue.
Location is vital to the success of a storage facility. Although online marketing can help, a spot beside a major highway can make or break the business.
Additionally, customers will want to know that their items are safe and secure. Facilities can increase security with 24/7 on-site managers, gates, and security cameras.
The facility should have a variety of unit sizes to provide for the different needs of the community. For example, sizes of units can range from 5×5 for students to 10×34 for business storage.
Is Self-Storage Investing Right for You?
Self-storage can be a great addition to your investment portfolio. The growing market and low overhead costs make for an excellent low-risk investment.
Contact us now to learn more about self-storage investing!