Reasons to Love Investing in Self-Storage

Look around next time to drive about 5 miles from your home. But this time, look for self-storage facilities, and see how many you find just in that short distance.

Think it might be strange to invest in such a mundane operation? Think again. Read on to find out why investing in self-storage is a very smart opportunity.


Storage units are cash-flowing cows!

When we started looking at the idea of investing in single family homes and double-wide mobile homes in Texas and the Carolinas, they weren’t a very glamours investment either, but they were cash-flowing.


It’s the same thing with storage. They work well in up markets and down markets, making them perfect investments for people who are looking for something a bit more steady and reliable, while still enjoying fantastic returns.



They’re useful in an up market…

Think of it this way: in good times, people are buying things! Say, a boat or jetski, an RV, a new vehicle — you get the idea.


When we think about Millenials and they way they spend their money, they’re more experiential. They’re not getting into home-buying as quickly as previous generations, so they’re living in apartments or multi-family residences and spending their dough elsewhere.


So where are they going to store their skis and snowboards if not in a storage unit?



And, in a down market.

When people are downsizing from a 3,000 sq. ft. home to, say a 1,500 sq. ft. home, they need a place to store their things.


Whether the reality of them being able to use their stuff again, and to move into a bigger home is possible or not, they’re usually not ready to let go of their belongings. And storage is the perfect intermediary solution.



HOAs might not allow outside storage.

A lot of homeowners living in residential communities with an HOA or other such associations have strict limitations on what they can store in their backyard, driveway or other visible areas of their property. They might not be able to build a large shed for example – or even any kind of shed for that matter.


When you’ve got a 20 ft. boat and no where on your property to store it, you’ve run into a problem.



Most storage units are family-run and don’t have great management skills.

The vast majority of storage unit facilities aren’t run by big corporate offices; they’re owned by the Mom and Pop types. When you look at the numbers, there are very few owners with more than ten storage facilities in their portfolio; usually it’s around just one or two.


Family-run storage facilities typically don’t have great management systems in place, which makes them a good target for an acquisition and improving management metrics.



Former retail facilities are being converted into storage.

Think about all those empty K-Mart and Toys ‘R Us buildings. With the decline of big retail chains, new spaces are popping up that investors are looking at, thinking, “Hmmm, this could be storage.”


This point is actually two-fold when you look at it through a zoning lense. In a lot of residential towns, people don’t want a storage facility popping up next to their home, or their kid’s school. The conversion opportunities of existing spaces mitigates some of the pushback of zoning restrictions.



The online shopping boom is creating a new need.

Think about the advent of Amazon and Cyber Mondays — you can get just about ANYTHING delivered to your home nowadays, and retailers are quick to get with the times.


These shipments need a place to go, and to meet their demand, retailers are utilizing storage for their shipments to be held before further distribution.


Even individuals can have their purchases shipped directly to their storage unit.



Business start-ups don’t want to rent out costly office spaces.

Think about the small start-up, just getting their feet off the ground. They can’t afford a several thousand dollars per month office space, and they don’t need it!


Some facilities are creating shared spaces for small businesses, with a common meeting room, restrooms and the like, while each individual business can store their materials and equipment in their own unit.




Do Your Own Due Diligence


  • Consider traffic and population counts.

The placement of your facility is more important than anything. One thing a lot of investors get discouraged about is competition in the area.


“Well, there’s another guy just 6 miles down the road, and I don’t think anyone’s going to come to my place with him already so nearby.”


Think again! Consumers are all about convenience. Six miles might as well be halfway around the world. Even if you build your facility three miles from his, you’re going to target a whole bunch of folks who are thrilled to self-store just ten minutes closer to their house.


When we think about placement, we want to aim for a spot that gets at least 10,000 cars going by everyday.


What’s the population count in a 1, 3 or 5 mile ring from your facility? These are numbers you want to deeply consider before going in.


  • Look for places with more multi-family vs. single family homes.

Compared to single family homes, multi-family units are more likely to use your facility because they don’t have basements, attics, garages or driveways. They need another solution for all that STUFF!


  • What’s the average household income?

Generally shoot for $45k or more, but don’t count out lower areas either. If you’re looking at higher income areas, you can start thinking about climate-controlled units.



What’s the best way to go about starting this kind of investment?

By teaming up with people who do this professionally all the time, like us!


If you’re interested in storage facilities investment opportunities, we can help.


Stay tuned to learn more about our projects, or get in touch here.


When You’re Ready, We’re Here


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Why Having Self-Storage In Your Portfolio Makes Sense
The boom in self-storage facilities is not just your imagination. See here why it is becoming a very smart investment as people continue to buy stuff that needs to be stored!