6 Major Benefits of Investing in Self-Storage
Self-storage is a hidden gem. No one ever really talks about it. Why? It’s because it’s a “boring” investment. Self-storage properties aren’t exciting to look at. When you open them up, there’s just a bunch of old stuff in there. No one drives around town and looks at their “dream” self-storage property. It just doesn’t happen.
Self-storage may be boring, but it’s an excellent investment. In fact, I find it to be one of the best investments in the market today. Here are 6 major benefits of investing in self-storage properties.
1. Minimal management required
Managing a self-storage property is extremely easy. No tenants, toilets, plumbing leaks, or other common maintenance issues make it much easier to manage than other real estate. You don’t even need anyone to be there to look over the property. You can just install cameras and other security tools to watch the property for you.
When a recession hits, people often downsize their homes and move into smaller ones. What do they do with all of the stuff they have that can’t fit in their smaller home? They usually put it in a storage unit. Recessions also force some people to have to sell their homes and start renting. This benefits self-storage because renters, on average, move three times as often as people who own their homes. Self-storage units are a convenient place to store items when you are moving frequently.
3. No evictions
If you’ve ever gone through the eviction process for a tenant, you know how much of a nightmare this can be. With self-storage, you don’t have this problem. Delinquent payment processes are a lot simpler to execute because there are no evictions. It’s also much easier to get the unit ready for the next renter when someone leaves.
4. Lack of supply
Currently, self-storage is significantly underdeveloped and there is an increasing demand for self-storage units. It’s going to take years for construction to catch up to this rising demand. This lack of supply has resulted in record-low vacancies in many markets. Savvy owners have seen this as an opportunity to push rents higher and increase their profits.
5. Highest ROI of any asset class
Over the last 40 years, self-storage has the highest long-term return rates of all the major real estate asset classes. This includes shopping centers, apartment buildings, offices, and industrial. Self-storage properties also have a multitude of ways to increase value. Adding boat/RV storage, solar panels, or cell towers are all ways that you can add value to the property.
6. Less competition
As I mentioned earlier, self-storage is boring. This means there is less competition in the market. Most people are more interested in flipping houses or trying to find the next get-rich-quick scheme. This, along with the increase in demand for self-storage units, makes it much easier to find good deals.
The self-storage industry is continuing to grow, and I doubt that it will stay a secret much longer. Now is the time to take action and enjoy all of the benefits of owning self-storage!