Real estate investments come in a variety of forms. The amount you invest and your confidence level might help you choose the best solution for you. However, lately, investors have been focused on a new type of investment: self-storage. As a result of the rising market, self-storage now has the potential to provide substantial revenue. People and businesses frequently use storage facilities to keep their belongings and household goods safe. Also, investing in a storage facility is much cheaper than investing in apartments and houses. You just need a small amount of money to buy your first unit and then gradually develop it. But let’s talk about why investing in self-storage facilities is a good idea in a bit more detail, shall we? Here are the main reasons you should at least think of making such an investment.
All people, companies, and businesses need a self-storage unit sooner or later. In addition, they will need it no matter the economic situation. For instance, if there is a downturn, they will probably need to downsize, so they will need a place to keep their belongings safe. Temporarily or for an undefined term. At the same time, if the economy is doing great, people and businesses prefer to follow the advice of expert movers such as hnmovers.com and use self-storage during relocations. They can store some of the things they don’t need frequently or put away seasonal items. Also, people can use self-storage to keep their homes from becoming overwhelmed with clutter. Just rent a unit and let your home or office breathe.
Faster turnaround time
You probably know that getting an apartment or house ready for a new tenant can take a lot of time and work. You will need to repaint the walls, make repairs, or clean the whole house. That might take the property off the market for an extended period and require significant expenditure. In the case of commercial or office spaces, you might need significantly more preparation time and even more funds. For self-storage units, you need up to 20 minutes of work to get them ready for the next customer. You just have to take out any leftovers, clean, and sanitize the space. In addition, unlike apartments and homes, where you may need to hire a team to help you get them ready, you can do the job yourself in a self-storage unit.
Self-storage facilities do not require much upkeep or supervision. You can even reduce property management costs and the number of on-site visits. Simply installing a CCTV system and adding remote sign-ins will make your job much easier. All you have to do is keep the units clean and updated. Furthermore, you don’t have to worry about decor or furnishings. Those are things that matter in a house or apartment, not in a self-storage unit.
However, if you only have a small number of units to manage, you can hire personnel to do the job. In reality, one to two people are sufficient to handle a self-storage business at first.
Fewer tenant problems
Investing in self-storage facilities is a good idea since it eliminates numerous tenant issues. For instance, you can rent the storage unit for just one month, compared to six months or more for apartments or homes. In addition, the lease can automatically renew after a month if the parties agree. And what is even more advantageous is that you can increase the rent more often than for a home. In reality, if there is enough demand, you can increase the rent every month.
At the same time, if you have a problematic tenant, it is much easier to get rid of them. You just need to send a 30-day notice of eviction rather than wait for a longer time in the case of an apartment or house. Also, if they refuse to pay within 5 to 7 days, you can lock them out of the unit. In addition, after 57 days, the law allows you to sell the tenant’s possessions without legal repercussions.
In recent years, the return on investment for self-storage has been around 17%. This percentage is higher than the ROI for office, industrial, or retail spaces in the same period. However, because of such a good ROI, self-storage facilities can sometimes be hard to find in the real estate market. Yet, if you know which doors to knock on, you have a good chance of success. For instance, you can talk to a local commercial real estate agent to see if they have anything listed at the time. Also, you can reach out to storage property owners and ask if they are interested in selling or if they know others that would. Once you locate a facility for sale, you hit the gold mine. You will earn money as long as you own and operate the business and when you decide to sell.
Downsides to investing in self-storage facilities
Even with all of the advantages of self-storage investing, you may encounter several difficulties. Or, you might need to adopt different tactics to make your business work better. For instance, you might not have the storage facility working at its desired capacity. In that case, you need to prospect the market and see the needs of the tenants in your area. Also, you need to have a facility that is in a high-traffic, easy-to-reach area. So, you might need to move your business long-distance, but it can be worth it.
If you need to reach other parts of Maryland, for example, you can safely reach the area of your interest with the help of long distance movers. They can do the job quickly and efficiently, allowing you to reopen your business in a better location as soon as possible. In a new area, you may find better tenants, higher demand for storage, and even better personnel.
We believe investing in self-storage facilities is a good idea because of the cash flow. And although building your own facility is a fantastic way to invest in your future, buying a facility can also generate a lot of income. However, if you want to buy a facility, ensure you ask for all the necessary details. For example, to determine whether the facility is worth your investment, you need to know the monthly expenses and earnings. You must also understand your competitors and be prepared to compete with more powerful investors. If you are willing to do so, all we can say is congratulations! You will be the proud owner of a self-storage business.