Buy an Existing Self-Storage Facility.
One way to enter the self-storage market is by purchasing an existing business. This can save time as everything is in place, and there is already a customer base. However, purchasing a facility can be expensive upfront because you will be buying a business with land, a building, and an existing customer base. Class A facilities are usually higher-quality climate-controlled storage units, whereas Class B and Class C facilities may be lower-quality. Buying an existing storage lot can possibly make more money than investing in REITs, but it also means more hands-on management and responsibility because you will be actively running a business and managing employees.
Build a New Self-Storage Facility
There is a high demand for self-storage facilities, and many have long waitlists. Building a new storage facility can be a way to get started and make money. To create a self-storage facility from the ground up, you will need to find land to buy, build your facility, and open up for business.
Buy Shares in a Real Estate Investment Trust (REIT) That Focuses on Self-Storage
If you want to invest in self-storage without actually owning and managing a business, one way is to invest in an REIT. With REITs, you can invest in a portfolio of self-storage properties without physically owning or managing the facilities yourself. This is more passive because you don’t need to hire employees or do maintenance checks.
Rent Your Space on Neighbor.com
If you have extra space in your own home such as a garage, closet, driveway, or spare room, you can rent it out as storage space through a platform like Neighbor. With this site, you can earn monthly income. You will need to create an account, describe your space, set your price, and manage rentals.
Advice for Managing a Self-Storage Facility
Managing a self-storage facility requires time and effort. It is important to sell amenities to renters, such as vehicle washing, starting up their vehicle or checking on it, electrical plugins to charge vehicles or RVs, and so on. You’ll also want to think about how much money it will cost you to actually run the business. Will you need to hire workers? How much will maintenance cost you so that you can keep the facility in good condition?
Making Money from Self-Storage
To make money from your self-storage facility, you need to think about what your customers want. Selling amenities to renters can increase your income. You’ll also want to think about how much money it will cost you to actually run the business. Will you need to hire workers? How much will maintenance cost you so that you can keep the facility in good condition?
Security in Self-Storage Facilities
Security is very important for customers when choosing a self-storage facility. Customers care about their stuff and they don’t want anything happening to it, such as it being stolen. So, you will want to make sure that your facility has a lot of light (especially at night time), security cameras aimed at different angles, and gates with codes.
Frequently Asked Questions About How To Invest In Self-Storage
How can I find a self-storage business for sale?
To find a self-storage business for sale, you can start by searching on websites like LoopNet and BizBuySell.
What are the best self-storage stocks to invest in?
The best self-storage stocks for you to invest in will depend on your own money goals and the amount of risk you want to take on. Some of the most popular and best self-storage stocks include Public Storage (PSA), Extra Space Storage (EXR), and CubeSmart (CUBE).
Which self-storage REITs have the best returns?
Well-known self-storage REITs include Life Storage (LSI), National Storage Affiliates (NSA), and Simply Self Storage (SSS).
What risks are there with investing in self-storage?
Like with all businesses, there are risks when it comes to self-storage. Some risks include competition, changes in demand, and possible natural disasters that could hurt the facility.
How profitable can a self-storage business be?
The amount of money that a self-storage business can make depends on many things such as location, demand, and operating costs.
Can owning a self-storage unit generate passive income?
Owning a self-storage unit can generate passive income if you rent it out to others.
Frequently Asked Questions
What are some risks associated with investing in self-storage facilities?
Investing in self-storage facilities can come with various risks. Some of these risks include lack of demand, oversupply, competition, and economic downturns. It is important to conduct thorough market research and due diligence to assess the potential risks before investing in a self-storage facility.
What are the returns on investment for self-storage?
Self-storage facilities can provide attractive returns on investment, with some investors seeing returns of 8-12%. However, the returns can vary depending on factors such as location, competition, and market demand. It is important to carefully analyze the market and potential returns before investing in a self-storage facility.
What should you know before investing in a storage unit development?
Before investing in a storage unit development, it is important to consider factors such as location, market demand, competition, and the potential for future growth. Additionally, it is important to understand the development process, including zoning and permitting requirements, construction costs, and timelines.
Is a self-storage business a good investment?
A self-storage business can be a good investment for those who conduct thorough market research and due diligence. Factors such as location, competition, and market demand can greatly impact the success of a self-storage business. It is important to carefully analyze these factors before investing in a self-storage business.
What are some top self-storage REITs to invest in?
Some top self-storage REITs to consider investing in include Public Storage, Extra Space Storage, and CubeSmart. These REITs have a proven track record of success and have shown consistent growth over time.
What are some factors to consider before investing in a self-storage syndication?
Before investing in a self-storage syndication, it is important to consider factors such as the experience and track record of the syndication sponsor, the terms of the investment, and the potential risks and returns. It is important to conduct thorough due diligence and seek the advice of a financial professional before investing in a self-storage syndication.
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