In today’s episode, we’ll be discussing the keys to success in the self-storage business. We’ll be going through everything from site analysis and planning to monitoring economic trends and seizing opportunities, so don’t hesitate to join my guest Scott Lewis and me.
Scott is the CEO and co-founder of Spartan Investment Group, and he’ll be sharing knowledge from firsthand experience. Spartan Investment Group owns self-storage facilities all over the country and provides its partners with amazing returns. Due to its fantastic performance track record, we’re more than happy to hear Scott’s take on the state of the self-storage industry.
Actionable Advice on Succeeding in the Self Storage Industry
The key to success with real estate investments is scanning the market to find the most lucrative deals. You need to look for properties with a lot of potential. Most commercial real estate can be turned into a self-storage facility, but you should take into account other factors such as location, accessibility, etc.
Other asset classes might be in demand, but they don’t fulfill three crucial criteria like self-storage units do. When you think about it, self-storage is:
- Easy to manage
- Easy to operate
- Easy to evict
Hence, you would virtually have no problems or obligations toward your property. You can hire a management company (or even just one person) and become a completely passive investor. There would be no clogged toilets in the middle of the night, like with residential properties! Customers pay rent on time, occupancy rates are high, and there aren’t a bunch of legalities to worry about.
Learning from Mistakes
A lot of investors make mistakes, but the best ones learn from their mistakes. Naturally, you’d want to conduct due diligence on sponsors, partners, and other businesses to avoid mistakes in the first place. Don’t put the money into a deal blindly, and make sure to always research people you will be working with.
Watch the Exit Cap
Don’t be greedy, and monitor the market carefully. The price of properties can change, so it’s best to set the exit mark in advance. You shouldn’t be lured into a commitment with a particular property for longer than it’s needed to reap planned returns.
Consult with Experts
To grow your portfolio or succeed in managing your self-storage business, you’ll need help from the best. If you surround yourself with professionals that are doing a fantastic job, from market analysts to brokers, you’ll increase your chances for success.
While self-storage is a local type of investment that is still a niche industry, it’s expanding very fast. You want to stay informed about the state of the local commercial real estate market so you won’t stumble into highly competitive fields. Especially for beginners, competition can be disheartening. Hence, it’s better to do your homework and find better properties and locations.
Be Prepared for Surprises
While most things don’t go according to plan, you should keep the habit of planning. That way, if something unexpected happens, you’ll know how to react and get the project back on track.
The self-storage industry might seem confusing or complex, but it doesn’t have to be. With the right keys to success, every self-storage business can be profitable! The demand for storage space is high, so don’t miss on starting a successful business. For more practical advice, check out our FREE Blueprint for tips on how you can succeed in the fastest growing real estate sector in the US!