Self-storage facilities are a multi-billion-dollar industry. It’s estimated that over 14 million U.S. households rent a storage unit every month. The reality is that people have a lot of stuff, and you can capitalize on the self-storage investment boom to establish a passive income for a lifetime of wealth. Learn more about self-storage investing here, including how and why it might be right for you.

Key Takeaways

• Self-storage facilities are a recession-proof investment. Regardless of how the housing market performs, people will always need a place to store their items.
• As a property manager, you can enjoy the perks of having low-maintenance facilities that do not require constant upkeep or repair.
• Storage units are highly profitable due to low operating costs, helping you avoid unexpected expenses.
• Provide your storage unit renters with flexible lease terms and maintain a high tenant capacity to ensure a strong, steady income stream.
• Finding the right self-storage facility property in your area can be difficult, but you can expand your market to increase your investment opportunities.
• Whether it’s for commercial, residential, or self-storage properties, real estate investing education is invaluable. Learn effective ways to make your money work for you so you can achieve financial freedom.

What Is Self-Storage Investing?

A self-storage facility is a warehouse comprising numerous units, each offering a separate lease to prospective renters. Investing in a self-storage facility means purchasing the warehouse as an asset that can turn a profit for you with minimal risk and maximum benefits. People typically rely on storage units to house their furniture or vehicles for safekeeping while they move. They also use these units to supplement their storage needs.

However, self-storage isn’t limited to homeowners. Many businesses use storage units to protect and store their inventory and work equipment. They can also be helpful for frequent travelers, college students, digital nomads, or short-term renters.

The Perks of Storage Unit Investing

Investing in a storage facility can provide great economic potential for a secure financial future. Consider the following perks of self-storage investing to help you understand why it’s a good idea:

Be a Part of a Recession-Resistant Industry

People need a place to store their belongings, whether they’re personal or for business. Storage units have endless possibilities because the demands vary depending on the client. Self-storage offers excellent support to many people during transitory periods or as semi-permanent solutions to small living spaces. As a result, self-storage units remain profitable regardless of market conditions.

Less Maintenance Means Less Hassle

You won’t have to worry about calling a plumber to fix a leaking pipe or install a new water heater. Unlike a residential property, a self-storage unit has no appliances that need to be repaired or replaced. You can also avoid worrying about wear and tear on countertops or fixtures since they don’t exist in a storage unit. Additionally, the self-service aspect of this industry makes the process of tenants moving in and out a breeze. As the property manager, you don’t need to assist tenants and can enjoy the hands-off approach of self-storage investing.

Establish Favorable Lease Terms

Establishing favorable lease terms that align with individual needs can draw tenants to your facility. For example, a family buying a new home may need to store their furniture while they move. You could offer them a temporary storage unit rental to ease their moving stress. A couple downsizing from a big house to a small condo may need a place to store their keepsakes due to limited space. You could provide a move-in special featuring a storage unit with an annual lease to match their new rental agreement.

Investors appreciate the flexibility and steady monthly income that come along with favorable lease terms. A month-to-month lease is standard with self-storage units, but as the property manager, you will have the final say in the lease terms you provide. You can also adjust your rental rates to correlate with changes in the market, so you never miss out on making a profit.

Low Operating Costs Equals More Profits

Investing in real estate is often associated with high operating costs due to grounds upkeep, routine maintenance, and expensive utility costs. Except for climate-controlled units, most self-storage facilities have relatively low operating costs. There’s less need for ongoing facility maintenance because they serve only one purpose. When you invest in self-storage, you can profit more since you’ll pay less out of pocket to keep the facility operating. 

Maintain a High Tenant Capacity

Unlike residential real estate, where you only have a few tenants you can rely on for income, self-storage facilities typically have over 100 units. You can maintain a high tenant capacity to generate positive cash flow, which translates into  a passive income stream for lifelong wealth. Furthermore, tenants are more inclined to pay rent on time, and, you can evict non-payers swiftly.

The Drawbacks of Self-Storage Investing

There are some risks to self-storage investing, as is true for any type of investment. Because self-storage investing has skyrocketed over the past few years, many investors have already entered the market, so it could be challenging to acquire a facility. Also, investors love diversifying their assets, which increases the likelihood of multiple storage facilities existing across a county. 

Take time to research where you want to invest and determine the demand, such as in cities vs. rural areas. With enough planning, you could also circumvent high interest rates or the cost of capital when purchasing a self-storage facility; consider building one or buying into an established franchise instead.

How Do Storage Units Compare to Other Real Estate?

Storage facilities belong to a high-performing sector of the real estate market that tends to surpass retail, industrial, office, and healthcare properties. Even when the housing market is high and people are pushed to rent instead of buy, they still need a place to put their belongings. The ongoing demand for self-storage creates a recession-proof investment.

Remember, you’re not limited to storage facilities geared toward household items. There are several options worth researching to find the right fit for you. For example, the COVID-19 pandemic increased people’s desire to travel and adopt new activities. As a result, there has been an increase in demand for boat and recreational vehicle storage facilities over the past two years. 

Many residential properties prohibit residents from storing these vehicles on their property, so they need a place to house them. Investing in a self-storage facility could become quite profitable for you, depending on the area you purchase or build in.

Learn More About Real Estate Investing

You’ve reached a point in your life where you want to make smart choices for your financial future. Educating yourself about real estate investing could make the difference between negative and positive economic gains. That’s why the experts at Infinity Investing offer monthly workshops to give you the valuable tools you need to build your investment portfolio. 

Sign up for the 360 Pro membership  to get exclusive access to real estate properties and be a part of a supportive Facebook community of like-minded business professionals. If you’re interested in stock market investing, you’ll appreciate Infinity Investing’s weekly stock tips, advanced stock techniques, and stock portfolio assessment.

If you’re ready to jumpstart your real estate investing career, invest in a self-storage facility. It requires little maintenance, has low operating costs, and has a high tenant capacity to help you secure a positive cash flow every month. Need more guidance? Save countless hours and dollars in specialized training by consulting with Infinity Investing’s financial experts today.