Why Self Storage?
As cities and suburbs grow, there is a constant tightening of zoning and ordinances which does not allow homeowners to have storage sheds or permission to store their vehicles and equipment outside. Consequently, the self storage industry is experiencing a rise in demand. This is an opportunity for you to take advantage of the fact that good things do come in a box.
The collection of ‘stuff’ that humans accumulate has to go somewhere. Particularly when their lives are in transition. The downsizing Baby Boomer and the frequent job-changes of the Millennial workforce also adds to the demand for this asset class.
In addition to a growing demand and hassle-free tenants, self storage investments have proven to have strong cashflow in both good and bad economies. It’s a proven recession resistant investment to add to your portfolio that you shouldn’t overlook!
Although we are big fans of Multi-Family housing investing, there are issues that you must deal with that do not exist in the self storage space. One example is that your tenants are boxes of stuff and the need for lengthy eviction procedures do not exist.
Benefits of Investing in Self-Storage
Value Add Opportunities
Not all properties are created equal. The property should have room for growth from both a sales viewpoint and preferably provide opportunity to expand to meet the growing demand of a market. Adding new construction and square footage means opportunity for more rental income
When we talk about value add components in self storage investing, we are looking for the opportunity to apply a variety of methods to increase efficiency and revenue through professional revenue management systems, advertising, ancillary sales revenue, tenant insurance and more.
Rent Increase Opportunities
Industry rent growth continues to show a steady increase according to industry experts. Most properties today offer climate control units which is duly appreciated by the consumer according to statistics published by The National Real Estate Investor: “Annual rent growth has been healthy, for non-climate controlled units more so than climate-controlled units.”
Does Self Storage Make Sense for You?
You can have the benefits of investing in a large-scale asset without the risks of having to do it alone. The lone wolf investor will most likely experience a higher risk in their portfolio regardless of what investment they make. By joining the ‘pack’ you can minimize risk and profit from the opportunity to be part of the larger investor player’s market and gain access to more attractive deals and professional management.