What You Need to Know to Get Started in Self Storage Investment
As investments go, self storage sounds humdrum. It’s not as sophisticated as a high-end shopping mall or an upscale restaurant. Nevertheless, this boring industry can be a sound investment that enables you to grow wealth with little capital outlay.
Self storage investing is not only for the wealthy. It’s attracting single-family, multifamily, and commercial real estate investors – people from all walks of life who are looking for an alternate vehicle to increase their wealth. It’s easy to get started in self storage investing, but there are a few things that you need to consider before taking the plunge. According to The Motley Fool, “Given self storage’s stellar historical performance, it still remains a smart buy and a clear winner for long-term buy-and-hold investors in 2022.”
Multi-Housing News predicts another strong year for self storage due to several demographic trends. Older millennials are forming families and establishing homes, and retirees are downsizing. Not to mention the pandemic, which has prompted people to leave urban centers in favor of suburban areas and smaller cities. These trends will continue into 2022 most likely benefiting self storage in the Sun Belt and smaller cities near gateway markets.
If you’ve ever thought about investing in self storage, now is the time and Pinnacle Storage Properties is the place to get you started.
Getting Started In Self Storage Investment
You can lessen the risk by educating yourself, performing your due diligence, and trusting the people that you trust with your money. Following are a few fundamental tips to help you make the right decision when you decide to dive into self storage as a method to build wealth.
- 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. Pinnacle Storage Properties partners with small investors, but there is no “typical” investor. A variety of individuals, from all walks of life, 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.
- Understand the self storage industry and what makes it a good investment. Don’t invest your hard-earned money into something that you don’t understand. It’s true that self storage investing can quickly compound your wealth and grow your net worth. But you have to invest in the right property with the right people. You can trust Pinnacle Storage Properties to guide you through the investment process. Their tried and true formula is to buy under-managed, under-enhanced, and under-developed facilities, upgrade to institutional standards, then refinance or sell to a REIT. Cash flow is stable, and you will make money through the entire process. With the right people and the right plans in place, your investment will pay off.
- Don’t let your emotions affect your judgment. Looking for an investment can be exciting, and finding what looks to be the right investment can be an emotional rush. Control your enthusiasm so that you can make a sound judgment. Look at the property and run the numbers. Your decision should be based on solid business principles.
- Perform due diligence. Read investor materials to understand how the market, the financials, and the physical property will work together to obtain the best outcome. Simply put, due diligence is the confirmation of the underwriting product. You want to be assured that the operators can build enough value into the facility to make money, repay lenders, and give investors a competitive return. Read Underwriting Self Storage Properties for additional information.
- Avoid unqualified and untrustworthy people. The reality is that people make poor investment decisions every day. When you do decide to invest in self storage, work with people that make you comfortable. You want a level of trust that allows you to ask questions and be honest about your concerns. The people that you choose to invest with should be able to explain associated risks, demonstrate a history of successful projects, and provide a competitive return on your investment.
Self storage investment requires little capital outlay, offers a stable cash flow, and provides you with an opportunity to grow wealth. If you think this is an investment strategy that would work for you, be sure to learn about the self storage industry and connect with people who want to help you achieve your financial goals.