Is There a Typical Self Storage Investor?
Americans are huge consumers. They love to buy stuff. When they’ve spent a good portion of their lives accumulating all of this stuff, their storage space is exhausted. What do they do with the items they buy—the extra furniture that they no longer use, the boxes packed full of forgotten things, and the recreational vehicles that take up space in their driveways? They store them.
Why So Many People Invest in Self Storage
Self storage is a fast-growing sector that has tapped into the growing market of people needing to store excess items. It offers consumers a secure place in which to store belongings that they don’t currently need but can’t bring themselves to discard. According to the Self Storage Association, nearly 10.6% of U.S. households currently put their overflow in a self storage unit. The majority of these people live in single-family homes with a garage, and 33% of them have a basement.
These facilities have become big business. The sector has generated more than $22 billion in annual U.S. revenues, and rentable space now totals more than three times the size of Manhattan island.
In a volatile stock market, self-storage investment provides a more stable cash flow. Turnover in these facilities is less of an issue than the short-term lease contracts might predict, and a large number of rentable spaces gives owners less vulnerability to substantial swings in vacancy rate. Realistically, the short-term nature of rentals allows owners to react quickly to market conditions.
Who Are the People that Invest in Self Storage
Self storage is a profitable, recession-proof option, with lower overhead and less hands-on management than most other commercial real estate investment opportunities. Given the economic instability of the current market, any individual looking for asset class diversification with a stable cash flow is a potential self storage investor.
Self-Storage investment requires very little capital outlay as compared to other types of commercial real estate. You don’t have to be wealthy, and you don’t have to actually understand how to operate a storage property.
At Pinnacle Storage Properties we partner with small investors, but there is no “typical” investor. Professionals, families, and individuals recognize the potential in commercial real estate, particularly the self-storage model. They recognize the recurring cash flow, appreciation potential, tax benefits, and lower correlation with the public markets. They recognize a solid investment.
One Investor’s Perspective
Everybody has different reasons for exploring self storage. It’s a low-risk investment, offering a stable cash flow along with competitive returns. There are plenty of available opportunities for small investors. Christina Alvino, the CEO and Founder of FineView Marketing, approached it from a unique perspective.
FineView Marketing is a full-service marketing agency specializing in website development and digital marketing for self storage owners and operators. Having worked in the self storage industry for over a decade and being so closely connected with this business, she had first-hand knowledge of the stable and profitable nature of it as an alternative asset.
After careful research and plenty of good advice, she decided to dive right into self storage investment. Christina notes, “Owning self storage properties has not only provided me with stable cash flow and an investment with a great return, but it enables me to support my clients with marketing expertise as well as operational knowledge. I’ve gained insight into my client’s pain points and am in a better position to provide them with pragmatic advice and solutions. Understanding the inner workings of self storage has made me more valuable to my clients.”
Other Professionals Who Invest in the Self Storage Industry
If you’re curious as to the wide variety of people who are attracted to self storage investment, here is a short list of those who see the value in self storage.
C-level software company executives
Commercial property appraisers
Construction company owners
Cost segregation consultants
Current self-storage owners
Medical professionals and surgeons
Medical equipment sales professionals
Retired military (West Point Graduate)
Oil and gas owners and executives
Past self-storage owners
Private family offices
Real estate professionals
RV park owners
Self-Directed IRA investors
Self-Storage industry vendor owners and executives
Single-family rental owners
Tech industry executives
As you can see, there is no typical investor in the self storage industry. Self storage is a smart long-term investment with low risk that provides a passive income stream, appreciation potential, and tax benefits. It’s a sound investment in an industry that’s not going away any time soon.