Forbes<\/a><\/p>\nOnly one asset class has an\u00a0average occupancy of 92%\u00a0and outperformed other asset classes in 2021,\u00a0self-storage. Self-storage can be a viable option for those looking for alternative investment opportunities. Self-storage can provide passive income, inflation protection (rates can change daily), and less tenant stress.<\/p>\n
Self-storage used to be associated with something that only hoarders might need to use. Today, however,\u00a040% of Americans\u00a0rent a self-storage unit. In part due to typical life events, including the 4 D\u2019s\u00a0Death, Divorce, Downsizing, and Dislocation. The last 3 of these tend to increase during challenging economic times, such as a recession. Historically, homeowners with smaller homes used self-storage more, but the percentage of owners of larger homes is on the rise.<\/p>\n
\u00a0What does self-storage look like in real life? According to the\u00a02023 Self-storage\u00a0Almanac, typically, people rent a 10×10 storage unit. The rent for these units increased by 13% in 2022. In 2001-2023 the average return on self-storage was 20.87%, and in 2006-2021 it was 18.76%. With numbers like this, you can see why new self-storage (and rehabs of legacy properties) are gaining the attention of investors.<\/p>\n
Many will select self-storage as an investment because it can be an inflation hedge. Most units are on a month-to-month rent, which can increase each month to keep up with inflation. As an owner of a self-storage center, you have different expenses than someone who owns multi-family, mobile home parks, retail, or office spaces. Furthermore, you do not need to buy and build your own! Some companies create self-storage turnaround investments that are for\u00a0accredited investors. These funds tend to buy self-storage units from \u201cmom and pop\u201d operators and add economies of scale, invest in the properties, and increase the return on investment (ROI) for investors.<\/p>\n
How are intelligent companies providing self-storage investments for their clients? Many look for underutilized commercial properties, like a closed K-mart. Those locations tend to be centrally located near a population center but are too small to become a WalmartWMT\u00a0-0.6%\u00a0or TargetTGT\u00a0+0.4%\u00a0and have a perfect footprint to convert to storage. It\u2019s a basic \u201cbuy low, redevelop, sell higher\u201d game plan. The smart funds also have a nationally recognized storage operator brand, a new storage location, and add the technology and economies of scale that a large operator has versus the smaller operators.<\/p>\n
Why should you consider investing in self-storage? Besides the inflation hedge, low maintenance, and economic durability, many self-storage locations are owned by a \u201cmom and pop\u201d operator, and they typically do not have the incentive or cash to roll out new technology, branding, or expansion that most self-storage investment funds bring to the table. In addition, the work to build a new self-storage unit and deal with permits and local municipality cares off most investors.<\/p>\n
Economic ups and downs are expected in 2023 and into 2024. Self-storage could be an option as an alternative to stocks and bonds, especially if you are looking for a recession-resilient opportunity with inflation protection and income.<\/p>\n
Securities offered through Arkadios Capital. Member FINRA\/SIPC. Advisory services offered through Creative Capital Wealth Management Group. Creative Capital Wealth Management Group and Arkadios are not affiliated through any ownership.<\/span><\/em><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"
Only one asset class has an\u00a0average occupancy of 92%\u00a0and outperformed other asset classes in 2021,\u00a0self-storage.<\/p>\n","protected":false},"author":3681,"featured_media":337674,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"single-article.php","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[2946,3007,2955,2823],"tags":[],"class_list":["post-337673","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-industry-news","category-inflation","category-self-storage"],"acf":[],"yoast_head":"\n
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