There are an estimated 53,000 facilities in the United States and self storage is used by 1 in 10 Americans. With remote work booming, people are relocating, downsizing, buying more and inheriting. The demand for self-storage continues to grow due to various other factors, including urbanization, population growth, and the trend towards smaller living spaces. Lifestyle changes, such as the rise of e-commerce and the increasing number of people in transitional living situations, contribute to the demand for storage units. The industry has seen a 7.7% annual growth since 2012 and isn't slowing.
Self-storage facilities have a relatively stable and predictable income stream. Whereas in other commercial real estate and multi family investment you may see significant disruption in income due to a small number of vacancies, self-storage scales revenue over a greater number of units per facility.
Self-storage is a stable investment and well positioned in both times of economic prosperity and uncertainty because demand drivers center around "life events." During economic upturns, individuals and families are upsizing their homes, growing their families, purchasing more products, all of which produce a need for additional space.
Storage is a recession-resistant industry because during economic downturns, individuals and businesses often downsize or face temporary financial hardships, leading them to seek affordable storage solutions. We all know "life events" like disaster, displacement and death continue regardless of the economy.
The self-storage business can be best characterized as “fragmented ownership." Of the approximately 53,000 domestic self-storage facilities, only 9,000 (or 18%) are operated by the top six publicly owned companies. Of the remaining 41,000 facilities, approximately 36,500 are owned by small operators who own and operate self-storage facilities. There are still more than 26,000 one owner facility owner-operators.This is the opposite of what you see in residential real estate investment and creates huge value-add potential. Many of these "mom and pop" owned assets are not operating at full potential and thereby offer great opportunity for Mission Storage Group to enhance the facility, execute effective operational plans and create value.
Compared to other real estate sectors, self-storage facilities have lower operating costs. While there are expenses such as property maintenance, security, and marketing, they are much more manageable compared to expenses associated with other types of commercial real estate. Operating costs for self-storage also tend to be very predictable, as opposed to multi family real estate because self-storage isn't providing living spaces.
Self-storage requires very little staffing and benefits from the ability to manage facilities almost entirely remote. It allows for greater resources at our fingertips, bottom-line cost savings and time saving, which enables us to execute our operational efficiency to create profit all while increasing customer experience.
Investment in self-storage is an investment in cash flowing business that is backed by a real estate asset. Well-located and well-managed self-storage properties tend to appreciate in value over time. As the demand for storage space increases and the supply remains limited, the value of self-storage properties can rise, allowing investors to build equity.
Investing in self-storage can be relatively hands-off, especially if you are a limited partner in an acquisition with a company like Mission Storage Group. This makes it an appealing option for investors seeking a passive income stream, otherwise known as "mailbox money."
Self-storage investments can provide attractive returns on investment. With proper management and effective marketing strategies, you can achieve high occupancy rates and rental rate growth, leading to increased revenue and potential profitability.
Common tax benefits for self-storage investors include deductions for property tax, interest expense, and depreciation. Depreciation is a non-cash deduction that is used to reduce taxable net income, which can be very beneficial when a self-storage investment is held in a taxable portfolio.
Self-storage investments can provide diversification within a real estate portfolio. By adding self-storage to your investment mix, you can reduce risk by spreading it across different asset classes, potentially improving overall portfolio performance.
Copyright © 2024 Mission Storage Group - All Rights Reserved.
Powered by GoDaddy
We use cookies to analyze website traffic and optimize your website experience. By accepting our use of cookies, your data will be aggregated with all other user data.