Self-storage is a growing industry that has become increasingly popular over the past decade. With the rise of e-commerce and the need for extra space, self-storage facilities have become a convenient solution for individuals and businesses alike. Investing in self-storage can be a profitable venture that can provide a steady income stream over time.
Additionally, investing in self-storage with a holding company can be a smart financial decision for those looking for a stable and reliable source of passive income. Self-storage is a growing industry, and the demand for storage units is expected to continue to rise in the coming years. In this blog post, we will discuss why investing in self-storage is like having a self-storage ATM.
Economies of Scale
One of the key advantages of investing in self-storage with a holding company is that it allows investors to take advantage of economies of scale. Holding companies often own multiple storage facilities, which means they can purchase supplies, equipment, and services at a lower cost than individual investors. Additionally, holding companies can negotiate better rental rates with tenants, which can result in higher profit margins.
High Demand
One of the main reasons why investing in self-storage is a smart choice is the high demand for storage units. As people accumulate more possessions, they need somewhere to store them. In addition, as the population grows, there is a greater need for housing and commercial space, which often leads to downsizing and the need for storage. This means that the demand for self-storage units is unlikely to decrease anytime soon, making it a stable and reliable investment opportunity.
Low Maintenance
Another reason why investing in self-storage is like having a self-storage ATM is that it requires very little maintenance. Unlike other types of real estate investments, self-storage facilities have few moving parts and do not require constant repairs or upgrades. This means that investors can enjoy a passive income stream without having to worry about the day-to-day operations of the facility.
Passive Investing
Another advantage of investing in self-storage with a holding company is that it can be a passive investment. Holding companies handle the day-to-day management of the properties, which means investors do not have to be actively involved in the operation of the business. This allows investors to earn a passive income without having to put in the time and effort required to run a storage facility on their own.
Consistent Cash Flow
Investing in self-storage can provide a steady and consistent cash flow. Unlike other types of real estate investments, self-storage facilities have a high occupancy rate, which means that investors can rely on a consistent income stream. In addition, self-storage leases are typically short-term, meaning that investors can adjust rental rates to keep up with market demand and maximize their income.
Minimal Risk
Self-storage is considered a low-risk investment because of the low cost of entry and the ability to diversify the portfolio. Investors can purchase small or large facilities depending on their financial goals and can spread their investment across multiple locations to reduce risk. Additionally, because self-storage facilities have a high occupancy rate, there is a lower risk of default compared to other types of real estate investments.
Self-storage also has been considered as recession-proof industry and considered as a great hedge against inflation. This is because when economy falters, people tend to downsize their homes or look for cheaper storage solutions, hence the demand for self-storage increases.
Tax Benefits
Investing in self-storage can provide significant tax benefits. Self-storage facilities are considered a depreciable asset, which means that investors can deduct a portion of the purchase price from their taxable income each year. In addition, investors can deduct operating expenses, mortgage interest, and property taxes, which can significantly reduce their tax liability.
Scalability
Self-storage is a scalable investment opportunity that allows investors to grow their portfolio over time. Investors can purchase multiple facilities and diversify their portfolio across different locations and markets. This allows investors to increase their income stream and build wealth over time.
Easy Management
Self-storage facilities are easy to manage, especially if investors hire a property management company to handle day-to-day operations. Unlike other types of real estate investments, self-storage facilities have few tenants and require minimal maintenance, making them an easy and convenient investment opportunity.
Furthermore, self-storage is a highly fragmented market, and most of the facilities are owned by small operators, leaving a lot of opportunities for large holding companies to consolidate and grow their portfolios.
Investing in self-storage with a holding company can be a smart financial decision for those looking for a stable and reliable source of passive income. With the growing demand for storage units, the economies of scale offered by holding companies, and the passive nature of the investment, self-storage can be a self-storage ATM for those investors.
In conclusion, investing in self-storage is like having a self-storage ATM. It provides a stable and reliable income stream with minimal risk and requires little maintenance or day-to-day management. With high demand, consistent cash flow, tax benefits, and scalability, self-storage is a smart investment opportunity that can help investors build long-term wealth.
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