Is self storage investments are still good?

Question

Do you expect self storage property to continue increasing in value? What are some factors for considering a self storage investment?

Ronald Rohde · Answer

Yes, self storage is still strong. Its considered recession proof since families will downsize if they move/lose a job. Stuff goes into storage. But understand that SS is a business, employees, software, marketing, pricing, etc.

its not as passive as other long term rentals

Paul Moore · Answer

Hi @Travis C wright. Self-storage investing, like almost anything else, has great deals in bad times and terrible deals in good times. There are overcrowded areas in deals that are already optimized and overpriced. Avoid those. There are other deals that have tremendous upside potential and you need to find those. I’ve written a BiggerPockets book on self-storage (Storing Up Profits) that might help you sort this all out. Buying self-storage and other real estate assets from mom-and-pop investors can provide significant profit and wealth creation opportunities in any market, and if we are facing a downturn, there will be more opportunities than usual. Good luck and happy investing!

Ronald Rohde · Answer

The hard part is that most sellers don't need to sell. Theres no economic push for sellers to reduce their value. I think volume will just go down.

Nicholas Liman · Answer

I definitely think you need to have a good DD period on any purchase. I've been trying to work some self storage deals myself across Texas and most of the time I'm seeing sellers advertise their cap rate as 5-6% after you've already gone through and raised rents/increased occupancy. It kind of blow my mind, but there's usually a correlation between rising interest rates and cap rates. So hopefully we see more value potential in the next year.

Brandon E callaway · Answer

Self storage investing has become a very hot investment in the past few years, as the demand for storage facilities is increasing every year. The reasons for the demand increase are the increasing number of people living solo and being unable to afford homes with large storage spaces and the growth of e-commerce sales. e-commerce sales have been increasing at a rate of about 20% per year for the last several years, and since the majority of items are being shipped with self storage companies, the storage facilities are filling up quickly. By 2015, the self storage market is expected to grow to $32 billion, so investing in self storage is a great opportunity.

Is self storage investments are still good?

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