Self Storage Facility Investing

In this article we look at self storage facilities a fast growing sector that has taken advantage of a growing market of persons needing to store excess household items.

Self storage facility investing.

Self storage real estate investment trusts reits are low risk investments in many ways. Self storage investing is one of the youngest and fastest growing forms of commercial real estate. However i personally don t consider myself a self storage investing expert in all aspects of the industry as many have labeled me i ve been the architect of dozens of extremely successful real estate transactions since i began my real estate career in 1993. There are a lot of simple inexpensive value adds.

From virtual non existence before 1970 the industry has grown to over 58 000 self storage facilities in the u s. Investing in self storage facilities self storage businesses. The strategy now is to buy mom and pop owned facilities upgrade them increase the income increase the value then refinance or resell it to an institutional investor. For example adding truck rental can increase income a few thousand dollars on a self storage facility.

Commercial real estate is made up of several different kinds of property types. Self storage facilities vary in size quality and construction. The self storage association estimates there are about 49 000 primary self storage facilities totaling 2 6 billion square feet of storage space and generating approximately 32 billion in revenue. And self storage facilities tend to be cheap to build maintain.

Most have conservative balance sheets. In this article we will provide an asset class overview highlight recent changes in use discuss low minimum options for investing in self storage and conclude with thoughts on how investors can use this information to make informed investment decisions.