Storage units in the U.S. brought in $39.5 billion in 2019, making it one of the fastest-growing sectors, with 50% growth since 2010.
Real estate is always a popular investment, but often people think of real estate as being either homes or offices. Self-storage investing has benefits over other kinds of real estate that investors sometimes overlook.
Bill Gates himself has recognized the value, putting his own money into the market. But luckily you don’t have to be Bill Gates to get a foot in this market.
Here are some of the self-storage investment pros and cons to help you decide if this could be the right investment for you.
Fewer Unexpected Expenses
Depending on the tenants, you never know how soon you will have to make expensive repairs to a home or office.
Because clients aren’t usually visiting their storage unit daily or spending a significant amount of time there, there is less wear-and-tear than other types of real estate.
When a water heater or septic system breaks, they are not only expensive fixes but can cause other damage that you’ll also have to pay for. You don’t have those problems with storage units.
Fewer unplanned expenses mean more income for you.
There’s a perception that storage units attract crime. While there’s no evidence that storage units experience more crime than other businesses, security is an important consideration. Any crime that occurs at your facility will be judged harsher than another business.
Having good lighting, visible security cameras, and an attentive manager are all ways you can help mitigate the risk of crime, which pays off in the long run, but can also mean a larger initial investment.
Only as Good as Your Manager
The small staff size most storage facilities have counts towards both the benefits and drawbacks of self-storage investment. While a small staff means less expense, it also means every employee carries more responsibility.
You don’t want to worry about the day-to-day business, which means you need to be able to rely on the people who do. A good manager can make or break a business, so make sure you’re investing in the right people.
Reliable in all Economies
Storage units are one of the businesses that make money even during a recession.
When the economy is bad, people downsize and need storage units to store all the possessions that don’t fit in their new, smaller homes.
When the economy is good, storage units are still in demand. People who are moving need temporary accommodations for their furniture. People who are starting new businesses also need places to store supplies for their start-ups.
The reliability of self-storage income despite what the economy is doing makes it a highly appealing investment.
Opportunity for Secondary Incomes
For anyone still asking, “Is self-storage investment right for me?” there’s still the icing on the cake: opportunities for added income.
Storage facilities can give savvy investors even more ROI if they just find the right opportunities. What might your storage clients need and how can you give it to them?
Something as simple as vending machines can offer that little extra boost to your self-storage investment. Many storage facilities partner with trucking companies, getting commissions on any customers who rent a truck.
The kind of person who should invest in self-storage is someone who will seek out those opportunities and take advantage of them to maximize their income.
Don’t Ignore Self-Storage Investing
Investors have the chance now to be part of a market that is expected to grow to $115.62 billion by 2025.
Self-storage investing is a great opportunity for new or seasoned investors. If you’re willing to put in the work to find the right franchise or even start your own company, the rewards can be outstanding.
To find out the best way to get started and how to avoid costly mistakes, get expert advice here.