Should You Invest in Self Storage?
Are you looking for something profitable to invest in? Read here to find out if it is worth your time and money to invest in self storage.
Real estate investment has long been a popular strategy for savvy investors looking to make big gains and create a life of financial freedom.
While traditional real estate investment can be quite lucrative at times, it doesn’t come without its pitfalls. You have the ups and downs of the housing market, fierce competition, and sometimes the unfortunate case of nightmare tenants that can be more of a headache than they’re worth.
But what if there was an alternative in the industry? We’re glad you asked because there is: invest in self storage.
Self storage investment has been around for a long time but has seen a recent boom from investors looking for a different niche in the commercial real estate market. There are many attractive benefits for a self storage investor, including high-profit potential, regular income, low-risk, and low maintenance.
But there are some things to know before you dive in. Keep reading to see if investing in self storage is right for you.
What Is the Self Storage Industry?
The self storage industry comes in many shapes and forms. It acts as a safe and secure place for people to store furniture and other household items, vehicles, boats, wine collections, and more. People love to collect things, and oftentimes they run out of room for all of their belongings and need a space away from home to house their treasures.
Now, with the proliferation of the “digital nomad,” there is even more demand for storage as many people need a place to store their possessions while they traipse across the globe.
Different Types of Self Storage
Storage comes in all different sizes, styles, and types of construction. They can range from a small ground-level lot where you can drive up to your self storage unit, to a multi-level building with climate control for small-scale manufacturing and other commercial ventures.
Benefits of Self Storage Investment
There are some enticing benefits to getting into the self storage game, which is one of the reasons that it’s seeing such explosive growth. The U.S. has seen a 2.2 percent annual compound growth rate, and the industry is expected to have a $115 billion dollar valuation by 2025.
Gigantic and Growing Industry
As mentioned above, the industry is enormous and only getting bigger. There are now over 50,000 self storage facilities in the United States, which is up over 3,000 since 2019. Not only that, but since 2010, average occupancy rates have jumped from 75.7 to 92.2 percent.
Reliable and Long-Term Tenants
In many cases, the leases are month-to-month, allowing the owner to take advantage of price increases in the market. Tenants tend not to be too fussed with a moderate rental increase, as the alternative of moving all of their stuff is a massive and expensive undertaking.
Self storage is a relatively safe investment regardless of the economic climate. In boom times, there will be a market for businesses looking to store excess commercial products, and in lean years, people often resort to downsizing their homes and will need a place to keep their belongings.
Low Overhead and Maintenance
One of the most appealing things about self storage is that it has a low overhead. There are nominal construction costs compared to other real estate investments, and there are fewer things that can go wrong with the space. Folks that use self-storage prefer to be self-sufficient, so for you, that means minimal maintenance and management.
When you own a storage facility you have the option to create additional money-making opportunities. You could add a truck rental service to your site or sell moving and storage supplies if you choose. You also have the option to increase rent, charge administration fees, as well as late fees.
Is Choosing to Invest in Self Storage Right for You?
When you invest in self storage you’re opening the door to consistent cash flow, huge growth potential, and a business that can weather any economic storm. It’s the perfect option for those looking for a stable investment in a growing industry, with minimal overhead and maintenance. Have a look at our great products and services to see how we can help you make your dream a reality today.