There’s a lot of advice out there about investing in real estate. If you’re good at it, you can make a lot of money and keep expanding. However, getting started is always risky. That house you purchase, improve, and plan to flip for a profit may not sell for years. The real estate market may be booming for years, then suddenly crash.
One area that has seen continuing growth, and that does well whether the economy is good or bad, is the self storage market. It’s a 38 billion dollar industry, and it makes sense that people would want to get into such a booming sector of real estate. As long as people have extra stuff and keep accumulating belongings, it will continue to do well.
The cheapest way to invest in self storage is to purchase stock. Research various self storage companies and see which are growing. There are three major types. The first to be aware of are the real estate investment trusts, or REITs. These are large companies on the stock exchange. The second type consists of smaller businesses with a number of facilities that have gone public. These have a lot of potential for growth. The third type are facilities in our sister company, self storage coop Storelocal. While Storelocal stock is not available currently, some of our partners may have stock. These member facilities get all the benefits of being in a large REIT as part of the coop, making their stock promising.
Buying a Facility
If you want to go all-in and run a self storage facility yourself, you can do that, too. It will take work, certainly, but if you’ve been wanting to run a business, few are more profitable or have better growth potential. Let’s look at a few aspects of buying a facility.
Finding a Facility
Start by doing your research. If you plan to purchase a facility, look for self storage businesses operating in places where there are fewer facilities per capita. That will mean there’s more demand and a better chance of being able to expand.
Check real estate listings for self storage businesses for sale, but also call facilities and ask if they’re interested in selling. This way, you may get a good lead before it goes public.
Doing your research will take a lot of effort, but if you have the money to purchase a self storage business, it can be worth it.
Alternatively, you can purchase a lot in an area with the proper zoning and build your own facility. Of course, this will cost more and makes sense only if you have plenty of money to invest. Make a business proposal and get investors on board.
Why Self Storage Is a Great Investment
We mentioned how self storage does well in both great and bad economic times, but why is that? That’s simple. People need space to keep extra belongings no matter what the economy is like. During an economic boom, more people will use it as business storage, keeping sales stock and more. With more money in the bank, others may not feel a need to get rid of clutter and will put it in storage instead. During leaner times, people often move into smaller homes to save money and put their belongings that won’t fit at home into a storage unit.Running a Self Storage Business
The topic of how to run a self storage business is far beyond the scope of this, or any, single article. It covers everything from having the right sort of security in place to making sure tenants follow the rules, to how to legally take a unit to auction if a tenant stops paying their rent.
Fortunately, we have dozens of articles all about the self storage industry and how to run a facility. If you’re serious about getting into the self storage business, you can start reading them right away.
We hope this gives you a good idea of how to get into the self storage business, should you be so inclined. You’ll have a lot of work ahead of you, but we think you’ll find it highly rewarding.