Investing in real estate is a great way to acquire a steady cash flow with minimal effort – especially when it comes to self-storage real estate! If you’re ready to invest but caught between putting your money towards residential real estate and self-storage real estate, we can help you come to a conclusion – to us, the answer is clear! Below, we’ll go over just a few of the advantages that self-storage real estate investment offers over residential.
When it comes to most types of real estate, tedious chores like cleaning and keeping up with repairs can be a nightmare – especially in the realm of plumbing in sectors like residential real estate! Self-storage facilities, on the other hand, are a breeze to maintain.
In fact, most self-storage facilities are purposely designed with ease of maintenance in mind. They’re typically constructed from steel and other damage-resistant materials to keep any wear and tear to a minimum and make cleaning as simple and fast as possible. While you’ll still have to deal with things like a burnt-out light bulb every now and then, maintenance between tenants can often be as easy as a quick sweep, and then you’re good to go! Plus, you’ll likely never have to deal with plumbing, which is a huge bonus. Software like self-serve kiosks is also playing a huge role in the ease of self-storage maintenance. The need for capital improvements is kept to a minimum when it comes to self-storage, too, so the entire maintenance process is as hassle-free as can be – which also means a faster tenant turnover rate!
Overall, the tenant turn-over and certainty rates are much higher for self-storage real estate than they are for most other real estate sectors, including residential. For one thing, self-storage investments ultimately give you a much higher amount of tenants than residential investments do. This means that in residential real estate, the stakes are higher when it comes to occupancy; when you lose one tenant, you lose a huge chunk of your rental income. In self-storage, on the other hand, each tenant only accounts for a small portion of your overall rental income. This can provide much more peace of mind and stability.
At the same time, storage units likely won’t stay empty for long at all. That’s because the demand for self-storage is always high, and therefore the tenant turnover rate is much quicker than that of residential real estate.
On top of all this, self-storage offers more opportunities for income in addition to monthly rent, thanks to possible services like truck rentals and more.
Did you know that self-storage real estate allows for more frequent rent increases than other real estate asset classes? This is a huge plus for investors; rent raise restrictions are no issue to worry about!
When it comes to residential real estate, restrictions keep owners from raising rent for current tenants: typically, rent can only be raised once a year. In the self-storage world, however, owners are able to raise the rent as often as they want to. While it’s not wise to hike the rent up constantly, small raises here and there are often not large enough of an issue to lose tenants over. Meanwhile, these slight rent raises mean increased value and larger returns for owners and investors. It’s just another reason self-storage is the best real estate asset out there for investors!
Real estate has always been known to be a stable investment with steady returns, but we can’t forget the fact that a recession like the one we saw in 2008 is always possible, and the housing market didn’t handle that dip well at all. However, there is one real estate asset that was able to withstand this poor market. You guessed it: self-storage! This industry is known for being recession-resistant.
The fact of the matter is that self-storage is an investment opportunity that’s able to thrive in virtually any market, good or bad. During high points, people spend more money and therefore need more space to keep their excess belongings in (i.e. a storage facility). Meanwhile, when the market crashes, people are forced to downsize their homes and business, and that means that, yet again, they need space to store it in. Even during the Great Recession of 2008, self-storage saw the lowest foreclosure rate of any asset class, so you can have peace of mind knowing your investment money is as safe as can be no matter what – especially compared to residential real estate investments!
There are more benefits of self-storage over every other real estate class than we can cover fully in this article. From lower operating costs to higher investment depreciation to lower amounts of personnel required to run the property, self-storage has every other asset beat in just about every aspect.
If you’re ready to start your self-storage investment journey, TyMac is here to help. We use our years of experience and winning strategies to help all of our partners acquire the best possible investment opportunities, and we’d be more than happy to add you to our list of satisfied investors! Fill out an investor survey today to get started.