The self storage industry is continually growing; here’s why you should invest in it.
Self storage is a good investment for 2024 because there’ll always be something that needs to be stored and people who need to store these items. Moreover, the demand for self storage won’t decline as the population grows. With More People Moving into Urban Areas and needing to store their belongings before settling into their apartments or condo, the demand for self storage will likely increase in the future.
At a time when the economy is in a recession, people might be looking for more stable options to invest their money in than real estate (for example), with self storage being a viable option. Today, plenty of Self Storage Software available on the market comes with features like rental pricing calculators, inventory management, and maintenance tracking, lowering cost and effort for facility owners. Overall, flexibility and cost-efficiency make self storage investment an attractive one.
So, is self storage a good investment for 2024? Let’s find out in this article!
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Why Should You Invest in a Self Storage Business in 2024?
Here, we outline compelling reasons to back why you should invest in a self storage Business in 2024:
1. Self Storage Is A Decent Venture For Long-Term Growth Investors
Self storage is expanding globally, from big-city centres to small towns. The need for self storage facilities is growing with the demand for more space and privacy.
Many factors make this an attractive market for investors.
These include:
- the need for storage in every demographic,
- resistance to natural disasters,
- the low tendency for the items to wear out, and
- High Demand (due to increasing population density).
Similarly, self storage facilities are affordable investments for many people because the rental income and the capital growth match each other well in this sector. The rent schedule is based on time, not demand, so the longer you invest in this sector, the more you gain.
2. Self Storage Facilities Have Minimal Expenses
Investing in self storage has been highly profitable compared to other industries due to the cheap operating costs. Compared to other asset classes, investors in real estate don’t face considerable ongoing costs.
With a single function, such as storing items, there’s barely any need for regular upkeep. Moreover, there are minimal to no utility bills, with air conditioning systems being the exception. Finally, in contrast to multifamily dwellings, self storage units rarely require a live-in property manager to handle emergency repairs or routine requests for help.
With all of these considered, you May Even Consider Starting a Self Storage Business in 2024.
3. Easy-Going Tenants And Reasonable Lease Terms
Since renters can access their units whenever they choose, managing a self storage facility requires minimal intervention. A property manager’s only responsibility is to provide the tenant with a dwelling and sometimes some additional services, such as help with moving in. As a result, taking care of renters is a straightforward, inexpensive operation.
Investors can offer favorable lease terms and rates with shorter-term leases. Monthly leases are the standard in the self storage industry, allowing investors to respond to market shifts by raising or lowering rents. Also, renters have strong incentives to avoid being evicted for non-payment, as owners can move more quickly against such tenants.
Related: Why Tenant Screening Is Important Part of a Property Management Business
4. The Self Storage Industry Is Recession-Proof
Self storage has become known as a sector that can weather economic storms with relative ease. Renters may downsize their living arrangements or delay buying homes if they anticipate economic downturns or widespread job losses.
In a market where people are downsizing their homes, there is an increased demand for cheap storage options. Evidence from recent decades of performance data supports this assertion.
Between 1994 and 2020, self storage real estate investment trusts (REITs) had an annualised return of 16.54% — the highest return on average of all REIT sectors and nearly 6% higher than the S&P 500’s rate of return. During these 26 years, three recessions occurred, the longest of which lasted for seven years. Only the self storage REIT market provided a positive return on investment for investors during The Great Recession.
During prosperous times, self storage investments can generate healthy profits. Purchasers of holiday properties often rent self storage units to temporarily house their belongings. At the same time, tenants in the business and creative sectors may utilise them for product storage or to pursue their creative projects.
If the single-family housing market continues to improve, more affluent homeowners may be persuaded to sell their larger homes, driving up the price of storage units.
Frequently Asked Questions
Q1: Is the self storage business profitable?
Yes, it is.
Due to the high demand for storage space, self storage is a highly lucrative business, especially in populated cities. You can earn significant profits in 2023 if you invest in self storage.
Q2: Do storage unit owners make money?
Yes, they do.
Several variables affect how much money you will make from a given facility. These include: the facility’s size and location, Whether or not you had to get a loan to buy it, and how you intend to put it to use.
Q3: Is storage space in demand?
Yes, it is.
Their convenient location and security make storage spaces a haven for stowing away and safeguarding possessions anytime. Hence, it’s expected that the storage unit industry will grow in size and demand as the global economy enters a favorable epoch.
Conclusion
So, is self storage a good investment in 2024? Yes, considering that the self storage industry is one of the fastest-growing industries in the world. In 2023 and beyond, many people will be looking for ways to store their items correctly and in a secure place. Given that this industry is on the up, now may be a good time to invest in it.
