What do you guys think about Self Storage properties for passive income?
@Michael Jenkins as long as the area is not saturated, great investment in my opinion, high up front cost, but great. Just like owning a bunch of little rentals without plumbing, wear and tear of tenants. My understanding is climate controlled storage units are very favorable now, especially if you can find an empty building and put the units inside, use the old parking lot to build more outside storage units. Almost everything can be done now using automated systems. Steel is quite high so you should try to get some good prices, companies run specials from time to time, good luck!
We've found good luck in buying existing underperforming properties in tertiary markets with an economic driver, like a university, hospital or military base. Many times we can pro forma these units to a 10-11 cap which you won't get in the larger markets.
Funding has been coming from SBA loans which allow us to acquire with 10-15% equity. Each transaction is a separate LLC to accommodate varying investors.
You can PM me if you'd like more info.
Excellent for Passive Income!
I follow a strategy very similar to @Ken Jernigan . Tertiary markets are just about the only place I look for storage:)!!I would advise a newer investor to not get the wrong idea about a university. While colleges are a great economic driver for a given area (and therefore a good considerations), too often, new storage investors think that students are a great customer...and they are but only from May to August so basing a year round business solely on a seasonal customer can get you in trouble.
@Michael Wagner Think you mean August to May. We've found while some students may leave for the summer, their stuff doesn't. It's much easier to store than to move. Universities are not just about undergraduates. Institutions with good professional programs attract students year round. Also, there are faculty and staff, plus the businesses created to serve the community.
(I realize this may be an older post, but as you're getting new activity - it's relevant. Did you ever make a final decision & move forward?)
My thoughts...No toilets, no tenants, no trash.
And Self Storage has a similar pricing model to Apartments (BUT see the above).
It's been very good to me & my family and we invest in NOTHING but Self Storage now.
If you think you may be interested in moving forward, I have a few arrows in my quiver that may be of service to you. Just like any new endeavor you're going to want to go into eyes wide open and learn as much as you can beforehand.
Please look up investing in Self Storage on the internet - lots of articles, videos, etc. Or PM me.
Best of luck to you!