Are you looking for a way to get a leg up on the market? Many investors have found success with self storage investments, and for good reason. Self storage units provide high returns with low barriers to entry. If you’re intrigued by the idea of investing in self storage, then here’s your chance to learn more!
We’ll cover the basics of self storage investment, including the various benefits of investing in self storage units and how it compares to other common investments on the market. We’ll also talk about what you need to keep in mind before diving into self storage investments and why now could be an especially lucrative time for this type of venture. There’s no better time than right now to get a leg up on the market—so read on to find out how!
The Benefits of Self Storage Investment
If you’re considering investing in self-storage, you’re probably wondering what’s in it for you. The answer is simple: Profit. Self-storage units are one of the best real estate investments on the market right now. Not only do these investments offer higher returns than other commercial real estate investments, but they require lower startup costs and come with a host of tax benefits as well.
When compared to other commercial real estate investments, self-storage investments have significantly lower startup costs. Normally, this would include plumbing, electricity, insulation, and vigilant management; however, when it comes to self-storage, most of these costs are nonexistent or minimized. That means that for investors who want to get a leg up on the market without breaking the bank, self-storage units are an ideal option.
On top of this, you can also enjoy common tax benefits related to investing in self-storage units. These typically include deductions for property taxes, interest expenses, and depreciation – all factors that help you save more and make more money out of your investment!
Advantages of Low Barrier to Entry
When it comes to investing in self storage, one of the greatest advantages you can benefit from is a low barrier to entry. This means that almost anyone looking to buy or rent a storage unit has access to the same pool of options—which in turn can lead to a much more competitive landscape.
Not sure what that means? Well, think about it this way: more competition in the market leads to lower prices for goods. Do you like the idea of being able to offer your customers more competitive rates? With low-barrier-to-entry investments like self storage, this is exactly what you have the power to do! That’s because, with more companies vying for your customer’s attention, it’s that much easier for you to maintain and adjust prices according to fluctuating market demand.
But remember—low barriers don’t just lead to cheaper prices; they also mean less risk. With self storage, you don’t need any specialized knowledge or qualifications before getting started—which makes it easier and safer compared to other types of investments where these criteria can often be prohibitively expensive or inconvenient. In short, if you’re looking for an investment option with secure returns and lower risks, self storage makes an ideal choice.
Low Risk & High Returns on Investment
You’ve likely heard that one of the best investments you can make is in real estate… and with self storage, you can lower your risk while enjoying a higher return. Money market funds typically have low risk and low returns, while high-yield savings accounts offer relatively safe investments with higher returns—but with self storage, you can get even more bang for your buck:
Low Investment & Low Risk
Self storage units require significantly less capital than other real estate investments like buying a rental home or apartment complex. Plus, you don’t need to worry about dealing with tenants or regulating occupancy. With lower costs of entry, you can focus on growing your wealth without taking on unnecessary risks.
High Returns on Investment
The average Self Storage return is between 8-10%, much higher than what you would get with a typical money market fund or high-yield account. And if that wasn’t enough, Self Storage has become a popular asset class and is easily achievable for the average investor—so it’s simple to get started!
Added Amenities & Versatile Uses
Did you know that self-storage units can offer way more than just secure storage? Some self-storage facilities offer additional amenities that can provide capital owners with a leg up on their competitors.
Amenities
You could look for a facility that offers computer access, fax machines, phones, printers, and Wi-Fi connection for those who need some extra office space. Gated storage areas, lighting, surveillance cameras, and fire suppression systems are also important things to consider when renting a self-storage unit.
These added amenities provide customers with additional options and convenience when renting a self-storage unit. Plus, these features could also give you an edge over the competition.
Versatile Uses:
Self-storage offers solutions to both residential and commercial customers who need secure space for long or short-term storage solutions. Self-storage units can also provide vehicle storage for cars, boats, RVs, and trucks.
Whether you’re running out of room in your garage or need to store confidential documents in a safe place—self-storage will get the job done!
Growing Demand for Self Storage Units
No matter where you look, the demand for self-storage units is on the rise. According to a survey, 6% of households rent a self-storage facility. This is up from 5% the previous year. The even better news is that by 2022 to 2023, the average occupancy rate is expected to land at an impressive 92%. Plus, an ever-growing labor market and increasing wages are helping contribute to this growth.
The global self storage industry was valued at $54 billion in 2021 and shows no signs of slowing down anytime soon. This has made it one of today’s most profitable investments. Self-storage facilities experienced an average annual return on investment (ROI) of 16.9% from 2009 to 2018. That just goes to show how profitable investing in self storage can be!
What’s more, investing in self storage has a low barrier to entry—you don’t need a lot of experience or expertise to get started. With these impressive stats and low investment costs, it’s no wonder why so many people are looking into investing in self storage units today.
Tips for Setting Up Your Self Storage Unit
When it comes to setting up your self storage unit, there’s a myriad of tips that can help you maximize profits. Here are a few:
Install a Vapor Barrier
To damp-proof, your storage space, install a vapor barrier. This will ensure that moisture can’t penetrate the walls or the floors.
Create Smaller Units
People need and want different size spaces for their storage needs, so it’s a good idea to create a range of smaller units that can accommodate different budgets and needs. This will help you to better serve everyone who is looking for self storage units.
Utilize Freestanding Shelving Units
These can come in handy if you want to use the full height of the unit to maximize profits. Freestanding shelving units are easy to install and will provide extra space for additional items.
Install Shelving
Having shelving installed in your self storage unit will give renters more organization and allow them to utilize their space better. The more organized their space is, the more likely they are to stay longer and continue renting from you!
Research Before You Build
Before building your self-storage facility, consider demographics, available storage types, and property values in the area. Doing so will give you valuable insight into what type of storage facility would be successful in your area before breaking ground on something that won’t work or won’t bring as high returns as you’d like.
Conclusion
Investing in self storage is a smart move for capital owners. It offers high returns, is a sound investment, and has a low barrier for entry. With the right research and due diligence, you can find a storage unit that fits your budget and goals perfectly.
Self storage is rapidly increasing in popularity and demand, and with the right knowledge, you can make a solid financial return without having to put in tons of effort or break the bank. If you’ve been looking for an investment that is secure, reliable, and profitable, then self storage could be the answer.
