With the rise in home foreclosures, baby boomers retiring to smaller homes and others downsizing, the self storage owner is seeing an increase in business. There are many types properties an investor can make in real estate. An investor can buy personal property, multi family apartments, commercial and industrial buildings. But one of the least risky is the property to rent for personal storing space. Not only are professional investors risking ownership, but first time business owners are being drawn to this business.
A small group of investors are becoming wealthy by accommodating the publics need to save and store our stuff. These investors are quietly building their net worth while enjoying afternoons on the golf course or weeks on a cruise ship.
A self storage owner has less maintenance and building upkeep than the owner of rental property has. Real estate investors often overlook this type of business believing the market is overrun with facilities, with too much competition. Although it is true the market has grown from hidden industrial garages to the modern facilities found everywhere, the investor can still purchase low priced facility and increase its cash flow by operating effectively and efficiently.
They might add other services to their business. For example a self storage owner can offer a shipping and mailing service. They might offer units that have temperature and humidity controls, moving needs such as boxes and supplies for sale or moving services. The investor who sees the facility as is, is missing out on the lucrative growth opportunities of offering additional services.
Another misconception of many would be real estate investors is the belief they have to build a new facility or a one that is newer to make any money. A smart investor will buy an existing older building that has been poorly managed and needs minor repairs. Big companies often overlook these facilities and they are usually available at a reasonable price. Do the repairs, either yourself or through a good maintenance group and the new self storage owner will begin to see a positive cash flow quickly.
Before you purchase any buildings research the market in the area. Location is a huge deciding factor in when purchasing a facility. The ideal site should be located in a major travel area and highly visible. Find out if the service is needed in the area being considered. Determine who and how much competition there is as well.
There are other benefits to investing in this type of real estate. On top of the regular monthly rent that you will collect, you will often be collecting late fees. It is not uncommon for tenants to pay an additional late fee each month. The maintenance of the units is low. The owner often hires a management company to take care of the daily and monthly needs of a facility. The company sees to the routine maintenance of the units, the collection of rents and evictions of tenants who have not paid.
Owning these facilities can lead to other services as well. The owner can add boat and recreational vehicle parking, notary, fax and copy services and records storing to their business.
Being a self storage owner can allow you to become wealthy without investing a lot of time in the business. As with any business investment, there are risks and decisions involved. The investor should do their research and plan properly before making a decision.
