From Flips to Fortunes: How Self-Storage Can Transform Your Investment Strategy

Investing in real estate can be a daunting venture, especially for novices who are wary of the complexities and capital requirements.?

The world of self-storage investing, however, offers a unique opportunity to generate significant returns with relatively lower risks.?

In a recent episode of the Path to Freedom podcast, I had the pleasure of interviewing Jacob Vanderslice, co-founder of Van West Partners, a company that specializes in self-storage investments.?

Jacob shared invaluable insights into the self-storage industry, from the basics of getting started to the intricate details of optimizing revenue.

WATCH: Unlocking Success in Self-Storage

Jacob’s journey into self-storage began with a simple observation: Many successful investors accumulated and held assets over time, creating durable and recurring revenue streams.?

This realization led him to pivot from residential fix-and-flips to self-storage, which he found to be less transactional and more scalable.

Key Points –

Lower Entry Barriers: Unlike buying an entire self-storage facility, Van West Partners allows investors to participate with smaller chunks of capital through their funds.

Operational Improvements: Jacob emphasized the importance of effective management. Acquiring underperforming facilities and optimizing their operations can significantly increase their value.

Durable Revenue: Self-storage offers recurring monthly revenue. Most leases are month-to-month, providing flexibility for both owners and renters.

Revenue Optimization Strategies

Jacob highlighted several strategies that his company uses to maximize revenue from self-storage facilities –

Dynamic Pricing: By adjusting rents in real-time based on supply and demand, Van West Partners ensures optimal occupancy and revenue.

Ancillary Income Streams: This includes late fees, administrative fees, merchandise sales, U-Haul rentals, and most notably, tenant insurance. These additional income streams can significantly boost overall profitability.

Operational Efficiency: Self-managing their portfolio allows Van West Partners to maintain high standards of operation, reduce costs, and increase tenant satisfaction.

Risk Management and Market Trends

Despite the advantages, self-storage investing is not without its risks. Jacob pointed out the primary risks and how they mitigate them –

New Supply: The main risk in self-storage is an oversupply in the market, which can depress rents and occupancy rates. Thorough market research and strategic location selection help mitigate this risk.

Economic Cycles: Self-storage has historically been resilient during economic downturns, but staying vigilant about market trends is crucial.

Legislation Risks: Potential government regulations on rent increases and eviction processes could impact profitability. Staying informed and adaptable is key.

Investment Opportunities with Van West Partners

For those interested in investing with Van West Partners , Jacob outlined the types of investment opportunities they offer –

Single Asset Syndications: Investing in individual self-storage properties.

Funds: Diversified investments across multiple properties, offering more stability and spread risk.

Jacob also mentioned the importance of understanding the management team and their track record, emphasizing that past successes are less indicative of future performance than the team's ability to navigate challenges and downturns.

Final Thoughts

Investing in self-storage can be a lucrative venture when approached with the right knowledge and strategy. Jacob’s insights provide a valuable roadmap for anyone looking to explore this asset class.?

Whether you're a seasoned investor or just starting, the key is to take informed actions and continuously learn from each experience.

Curious About Franchising? Let’s Talk!

If you’re interested in exploring franchise ownership as an investment vehicle, wealth building strategy or pivot out of a corporate career that’s grown stale, we should talk.

I’ve spent the past decade owning, operating and scaling my own franchise businesses, along with helping countless clients as a franchise consultant.

If you like, reach out to me and let’s find a time to connect.

There’s no cost and no obligation involved - my goal is to educate and facilitate vs. trying to sell you on franchise opportunities.

If that sounds like something you want to explore, I look forward to connecting soon.

You can also visit my website or check out my Path To Freedom podcast as well.