SELF-STORAGE INVESTING
INVESTMENT & DEVELOPMENT
Many self-storage owners also own other businesses or rental properties. Investing in self-storage can provide relatively stable, predictable income on its own or complement an existing portfolio of residential or commercial rental properties.
Early Storage Solutions
Residential property managers often face numerous maintenance issues, especially with plumbing, heating and cooling, electrical systems, and the eviction process. While owning a self-storage business is not entirely hassle-free, it is likely the easiest real estate investment to manage. Most self-storage facilities have minimal plumbing, limited electrical usage, and fewer climate control needs. The eviction/auction process for non-paying tenants is also simpler than in residential properties.
Occupancy tends to be more predictable in self-storage. A modest investment in a residential property might yield a fourplex or duplex, while the same investment in self-storage could provide 50 or more units. Losing one tenant in a residential property can significantly impact rental income, whereas the larger number of tenants in self-storage offers more stability. Despite lower per square foot rental rates, the development and operating costs of self-storage are disproportionately lower, making your investment work harder for you.
Storage Solutions Evolve
Similar to residential investments, self-storage often provides a more stable return by generating income from a larger pool of tenants. Self-storage businesses, much like retail businesses, benefit from high visibility and traffic. Facilities with full-time managers often operate small retail areas selling locks and packing supplies.
Self-storage can utilize odd-sized properties that other retail operations may reject. It generates minimal traffic and requires little parking. Properties with slopes, which might be unattractive for other uses, are excellent candidates for multi-level construction, effectively doubling rentable square footage.
Early Storage Solutions
Vacant retail properties, or “dark stores,” present great opportunities for self-storage conversion. These properties are often climate-controlled, have wide-open spaces, offices, and excellent visibility. Loading docks can be converted into loading/unloading bays for storage customers. The longer these properties remain vacant, the more likely the owner will agree to a lower lease rate or sale price, making them ideal for conversion.
If you are considering purchasing investment property, you owe it to yourself to investigate the self-storage industry. View our videos, sign up for our free seminars, or contact Trachte’s helpful sales staff to discuss your ideas. Use our investment calculators to determine if a site works for storage. At Trachte, we provide the information and expertise to help you build a successful business.
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