If you’re in the market to invest, consider taking a look at the self-storage industry. With 58,000 storage facilities in the country (and counting), it’s proven to be a hidden gem. While it may not be glamorous or exciting, it’s a low-risk-high-reward opportunity that many are leaping to get their hands on while the market is hot.
The following are reasons why you should consider staking your claim in this $38 billion dollar industry.
Whether it’s an upcoming move, a home renovation, or the inability to completely get rid of Grandma’s old furniture, the need for storage will always remain prevalent. Storage units are relatively cheap, reliable, and safe ways of storing extra belongings. Regardless of which stage of life someone is in, storage units can help when there’s a new baby, a divorce, or for storing items long-term. Consumers consistently continue to demand self-storage facilities like self storage North York to assist them through their changing lifestyles. For this reason, self-storage is becoming one of the most sought after investments.
One of the greatest benefits of owning a self-storage facility is it requires minimal management. Unlike being a landlord of a rental property for example, interactions with tenants, common maintenance issues, and traditional pitfalls are easily avoided or few and far between. Although compared to a rental property, tenants of self-storage units usually put down little to no deposit and do not have to provide notice when upon leaving the facility. That aside, you can still expect steady returns as this doesn’t disrupt profitability, unlike other real estate ventures.
The hassle of eviction is avoided with self-storage facilities as the owner of the facility has the right, per state laws, to auction the contents of the unit and keep the profits if the renter doesn’t pay or move out of the unit. This makes for a smooth exit and preparation for the next tenant virtually painless and low maintenance. Another benefit is that aside from having full-time employees, self-storage facility owners can take advantage of security cameras to keep a watchful eye on the inside and outside of the property without constant patrolling.
As mentioned, the demand for storage units has increasingly become on many people’s radar. Depending on where you live the monthly price of self-storage units can drastically vary which play as a factor for customers when choosing a storage facility. Pricing aside, potential customers are less likely to choose your competitor unit if your unit is near where they live or commute. Location is everything for storage-unit facilities as people do not want to go out of their way for a lackluster service that is usually considered a want, and not a need. Competition is also low for this industry as there is not a huge demand for investing in storage-unit facilities as there is for commercial properties or the ever-popular house flip. The opportunity to find great deals on storage properties along with being a potentially big fish in a small pond is attractive for investors.
Like any investment, there’s always risk which should be assumed. However storage facilities have proven to be a safe bet when it comes to stability. On top of purchasing a storage unit facility being a particularly smaller investment, they hold value well and can recover faster than other assets when the real estate market suffers. Additionally, the breakeven rate for self-storage facilities is significantly lower than that of an apartment or hotel. The rate for storage facilities being around 40-45 percent, far less than the 60 percent for apartments.
The financial crisis of 2008 forced many Americans to either downsize their home or to sell and begin renting, thus, causing an influx in the demand for storage units. Some have feverishly argued that self-storage facilities are recession resistant and a safe bet when it comes to withstanding a troubled economy. According to the NAREIT (National Association of REITs), self-storage was the only sector to churn a positive total return during the 2008 recession.
This self-storage industry is taking our nation by storm, proving to be one of the smartest real estate investments one could make. If you’re thinking about investing, the time is now. More detail is available via SelfStorageInvestor.com.