Investing in Self-Storage
Self-Storage shares the same attractive qualities as residential Real Estate apartment rentals, retail strip centers, office buildings, and industrial properties. These include leverage (borrowed money), tax advantages, passive income, personal control, and appreciation. However, Self-Storage offers a number of benefits that make it a superior investment. These include the following:
We are becoming a more transient society, moving around more and creating a greater need to store our stuff, thus the demand for Self Storage is increasing.
Canadians tend to accumulate a great deal of possessions, and we don’t want to “weed out” those things we don’t use, are sentimental about, or have nostalgic value, which in turn, creates more demand.
Most new communities will not allow us to store our boats, jet skis, RV’s, or even multiple cars on the street or in front of our homes.
Many retirees downsize their homes, requiring additional storage space that their smaller homes don’t provide.
Many businesses will downsize and operate out of smaller offices, necessitating a need for storage space. As well as many small distributors will utilize Self Storage to operate their businesses from.
Self-Storage facility development costs are often 30% - 50% less than office, retail, and apartment buildings.
Lower Operating costs for Self-Storage facilities are substantially less and as a result, owners are more isolated from large increases in utility and other variable costs that occur in the open market.
Occupancy is generally more stable, and therefore predictable, as there are typically a greater number of units in which to “spread the risk” than in other forms of Real Estate.
Month-to-month leases mean that rental rates can be adjusted easily. When occupancy increases, we adjust rates to compensate for the demand.
Demand for Self-Storage is not dependent upon the economy. When the economy is good, people buy more and store more. When the economy slows, people downsize, and require a cheaper alternative to store their extra belongings.