Real Estate Investing: The Self-Storage Industry

By Alyssa Browning

Real estate investing has been around for many years, but investing in the self-storage industry is one of the newest and most effective forms of investing (within the last 40 years)- if it is done properly. According to Christine Giordano- a freelance investments reporter- some people even consider self-storage to be a “recession-proof investment” because even when the economy isn’t great, people still have a need to store their personal belongings (Giordano, C., n.d.). She goes on to say “In 2011, when stocks were crashing, self-storage was the best-performing real estate investment trust sector with a 35.2 percent total return” (Giordano, C., n.d.). [For more on real estate investing see: A Guide To Real Estate Investing by Isaac Miller]

Furthermore, Joel Cone, a blogger for Smarter Investor, mentions in his article “Self-Storage Is an Investment Alternative”, that this industry is less hands on but still has a high profit potential (Cone, J. n.d). This industry works well in different types of economies and for different types of investors, because of the flexibility of operations for a self- storage facility (Cone, J. n.d.). To that point, for investors that want a more hands off experience there are many call management services that can integrate with your self-storage software to automate your facility and let you remain hands off. For investors who are interested in day to day operations the self-storage industry offers less work than normal tenant, landlord relationships, since the space is merely walls, a floor, and a ceiling.

In the past few years, self-storage has grown at a rate that outpaces other industries (Cone, J. n.d). The self storage industry is expected to continue growing steadily as consumers habitually store their excess belongings (Denham, B. B., 2016). In fact, in the last 20 years, the self-storage industry has increased rental storage by a whopping 10% in conjunction with the growing American population (Nead, N. n.d.). Furthermore, Nate Nead - a licensed investment banker and Principal at Deal Capital Partners- mentions that overall in the last 20 years this industry has grossed over $30 billion in revenues (Nead, N. n.d.). All this is to say that self-storage is one of the fastest growing and most profitable industries in the real estate investing sector and will remain as such for the time being.

Resources

Cone, J. (n.d.). Self-Storage Is an Investment Alternative. Retrieved from https://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/articles/2018-01-11/self-storage-is-an-investment-alternative

Denham, B. B. (2016, July 18). Self-Storage Sector Maintains Steady Growth. Retrieved from https://www.nreionline.com/self-storage/self-storage-sector-maintains-steady-growth

Giordano, C. (n.d.). 3 Things to Know About Investing in Self-Storage Spaces. Retrieved from https://money.usnews.com/investing/articles/2016-06-20/3-things-to-know-about-investing-in-self-storage-spaces

Miller, I. (n.d.). A Guide to Real Estate Investing. Retrieved from https://blog.mongolia-properties.com/a-guide-to-real-estate-investing

Nead, N. (n.d.). Self-Storage Industry Executive Summary - Trends, Growth & Opportunities. Retrieved from https://investmentbank.com/self-storage-real-estate-market/

• Previous
• Next