The Time is Right for Self-Storage Industry Investing
When you think of real estate investing, you typically think of rental housing, apartment complex or commercial real estate property leasing. But believe it or not, one of the best investment opportunities to rise up over the past few decades is the self-storage industry.
One of our favorite areas to invest in is self-storage real estate – because we find it is one of the most lucrative and safest places for private asset ownership.
Read more to learn about investing in self-storage facilities in light of the current economy.
Recession-Resistant, Self-Storage Continues to be Relevant
Even during the lows of an unpredictable economy or threats of recession, the storage industry has shown to prevail. There are several reasons for this but the main one is that individuals and families may need to downsize their residence, but they don’t want to get rid of their possessions, so self-storage plays a role in allowing them to affordably hold onto their possessions while they lower their monthly expenses.
Another phenomenon that has happened recently – more couples are opting for traveling lifestyles and storage facilities offer a solution. They don’t want to sell all of their belongings – but instead need to keep them in a safe, reliable space. The same thing is seen when couples combine lives at a later age – they have spent time accumulating their belongings and they are reluctant to just give or sell all of them, so they opt to store them until they can be dealt with.
Once storage is rented and items are stored, the average stay of a client is about 36 months – this is good news for the occupancy of the facility. We are a country of consumers, so self-storage will continue to be relevant as a cash-flow asset class.
Operating Expenses are Minimal
Self-Storage facilities generally offer a lower construction cost, combined with minimal operating costs and property maintenance costs. As compared to other rental properties, such as apartment buildings, duplexes or commercial business properties – there is very little that needs to be done on a routine basis – keeping employee costs, move out and maintenance costs to a minimum.
Self Storage Industry is Growing
Other real estate classes have taken a hit during and after the pandemic, but self-storage has been relatively insulated from these market shifts. According to rejournals.com, in 2020 the global self-storage market was valued at $48.02 billion and is expected to reach a value of $64.71 billion by 2026.
Self-storage has a broad customer base, needed by almost every type of person and every age of person at some point in their journey. This diversity of tenants along with sheer volume involved in one facility offers a level of stability as well. Unlike a commercial office building with 10 units available, self-storage has hundreds of units rented, even a modest turnover of 5-10% doesn’t significantly affect the bottom line. The short-term leases also mean that you are able to price in increases as leases expire, thereby giving you inflation protection.
There is Security in the Investment
The self-storage industry is here to stay and is actually going to be on an upward curve for the foreseeable future. As we continue to experience shifts from the pandemic – rising costs of living, less affordable housing due to higher interest rates and cost of materials, and more people working from home, the storage industry is poised to grow.
One secret to a successful self-storage portfolio is to have an experienced management team working for you. Custom Private Equity is just that team. Because we are involved with the ground up development of master planned communities in Southeast Texas and the Houston area in particular, we are presented with development opportunities that others never see. The facility we have underway today is in a master planned community and we are the only Self-Storage facility in the community serving 5000+ new homes.
We have at least 15 opportunities such as this available to us today due to our work in the marketplace for the past 20+ years.
We want to build you a portfolio of self-storage that will cash flow for decades and be an asset that keeps growing into the future.
Now is the perfect time to invest in a self-storage portfolio and put your money to work for you!
Don’t let economic uncertainty hold you back. At Custom Private Equity, we thrive in turbulent times. Our experienced team understands how to shield your wealth from inflation and market fluctuations. Let us be your trusted partner in securing your financial stability. Call (325) 695-1329 or click here to connect with our experts.