If you’re considering investing in self-storage but aren’t sure if it’s right for you, or if you just want to know a little bit more about how it works, we’ve got you covered. Below, we’ll go over everything you need to know–including all of the great benefits–before you dip your toes into the self-storage world.
Let’s start with the basics: to understand how investing in self-storage works, you have to first understand exactly what self-storage is. A self-storage unit is a space that individuals and families are able to rent out on a monthly basis and store their belongings in. A whole range of people need to use storage units, from families who need to store their furniture to businesses that are downsizing, so the demand for this type of real estate is always high. The rent is paid to the owners of the self-storage properties–that could be you if you choose to invest!
You can invest as much or as little as you want in the self-storage industry. Investors can own facilities and rent them out on their own, or purchase shares in investments like the ones we provide our partners with at TyMac.
What makes self-storage an especially unique investment opportunity compared to other real estate assets is that standard real estate contracts don’t apply. So when you own and invest in self-storage, you’re able to control and change the terms of the lease each month. This means you can raise the rent as you please.
Overall, investing in self storage is a fairly simple, virtually fool-proof way to bring in some extra income with great cash flow.
Self-storage is one of the best real estate investments you can make because the demand for these facilities is high and steadily increasing! Today, nearly 1 in 10 Americans use a self-storage facility.
There are many factors of our current world that continue to drive the demand for self-storage properties. For one, millennials (the largest demographic in the U.S. today) are delaying homeownership and continuing to rent later into life. Many people are relocating more frequently, and urbanization is pushing renters into cities with smaller living spaces, which all contribute to the need for storage units.
Even those who don’t rent and do own homes–like a large number of baby boomers–are downsizing at high rates, meaning they need space to store their extra belongings. The same goes for small and medium-sized businesses, which often keep many goods and equipment in storage facilities.
This consistently high demand means you can have peace of mind investing in this underserved real estate niche, where you’ll always have renters in need.
Investing in self-storage will give you some of the highest return rates real estate assets can offer. It’s an especially good decision when you consider the fact that you’ll save money you would have lost to repairs, cleaning, and non-paying tenants if you had gone the residential real estate investing route. Plus, you’ll rarely have to worry about low occupancy or a high tenant turnover rate; in the U.S., the estimated occupancy rate of self-storage facilities is an encouraging 90%! That means not having to worry about lost revenue between tenants.
One of the best things about owning self-storage is that maintenance is a breeze. That’s because self-storage facilities were designed with simplicity in mind first and foremost; the basic steel construction makes storage units extremely resistant to damage and easy to clean. Plus, they require very little maintenance. A good sweeping, a changed lightbulb, and just a few capital improvements every once in a while (maybe even years), and you’re good to go. This means the turnover time between tenants can be even quicker, keeping your cash flow as steady as possible.
Self-storage is also fairly cheap to operate, with a generally small overhead. You can simplify all of your operations through smart devices and technology, a decent website, and automation, and security technology is also a way to save money that you may consider.
Did you know self-storage saw the lowest foreclosure rate of any asset class during the great recession? That’s some great peace of mind for investors today. The self-storage industry can handle practically any market. That’s because the demand is nearly always high. In a good market, people are buying more things, and therefore need more space to keep them. In a bad market, people are downsizing and need a place to store their excess belongings. When you invest in self-storage, you don’t have to stress about the possibility of another recession. You can know your money is in good hands.
If you’re ready to invest in self-storage, become a partner of TyMac Group LLC today. We’re dedicated to creating the best possible investment opportunities for each of our partners–and thanks to our many years of experience and our winning acquisition formula, we’re good at it, too. Investing in self-storage is one of the best financial decisions you can make in your life; it’s great for growing your retirement nest egg, creating consistent cash flow, and diversifying your investment portfolio–and TyMac can help you through it all. Get started on your self-storage investment journey today by visiting our website.