Top 5 Reasons to Invest in Self Storage

Top 5 Reasons to Invest in Self Storage

Here are the Top 5 Reasons we believe that Self Storage is going to be one of the best assets to invest in over the next 10+ years:

1. High Demand - with the current economic conditions, people tend to downsize from their current living conditions and have a massive need to store their belongings until the economy recovers. Also, with an increased number of boomers reaching Retirment and downsizing their homes, the demand for storage is increasing massively, especially in the sunbelt and throughout the southern states like Arizona, Texas, and Florida.
2. Recession Resistant - Simple, when the economy is bad, people need to store things as they downsize. On the flip side, when the economy is booming, people tend to buy more stuff and like to store things. Its very recession resistant!
3. Low Expense Ratio - Expenses on self storage facilities are minimal compared to multifamily investing. Our expense ratios range from 15-25% depending on the facility and type of storage units. Comparing that to multifamily, where we see expenses generally falling around 50%
4. Low Breakeven Occupancy - Break even occupancy is so important, especially in times of uneconomic uncertainty and massive fluctuations in interest rates. Our facilities break even around 50% occupancy, meaning that over 40% of our tenants would have to move out before we dipped into our reserves.?
5. Low Turnover - people tend to not want to move their stuff once it’s stored. If we raise rent $5 a unit, the likelihood that someone is going to move to another facility is low. Although some tenants do opt for a new unit in another facility, we are generally able to fill that vacancy at a higher rate than the previous tenant was paying anyway due to the demand in the markets we buy in.?

With all of those factors here is something to consider:

We raise rent $5 across 588 units, that creates an extra $2,940 a month of income, multiplied by 12 months we created $35,280 of new income on the property without making any costly changes. At a 5.5 cap rate that creates over $640,000 of new value. In our case,?rents are over $20 below current market value, and as demand increases, that number will only go up. That is why we plan to hold these facilities for 10+ years, as we can achieve infinite returns on our investment, in an extremely low risk asset class.?

To learn more about our current investment opportunities, visit the link in bio or InvestwithJSJ.com

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