Investing in self-storage gives you the best bits of a property that yields income without any hassle. Life can be pretty easy when your tenants are just boxes!
Over the last decade, investing in self-storage has been considered lucrative and risk-free. Self-storage investment is also regarded to be recession-proof as it provides a steady and stable cash flow. This particular industry is rotary as individuals and businesses are always in need of storage spaces.
Passive storage investing is one way to diversify your real estate portfolio and a fantastic way of testing unfamiliar waters. We can bet that you’re on the edge of your seat right now, curious to know more about passive investments and how you can be a partaker. Read further to get detailed explanations on how to invest in self-storage passively.
What Does Passive Investment Entail?
Passive investing is an investment strategy that seeks to maximize returns by minimizing buying and selling.
Investing passively engage methods that avoid fees and measured performance that may occur during frequent trading. Also known as the “Buy and Hold” strategy, passive investments are usually long-term.
On the other hand, passive investment, when made right, yields more profit than active investments. Having a self-storage investment is one key example of passive investing. They’re so many self-storage investment opportunities to choose from that, in turn, makes it an exciting investment venture.
Benefits of Passive Investment
Investing passively has so many benefits that it’s surprising why most people don’t go into it. We’ll be looking at three main benefits of passive investments.
Frees Up Time
No one wants to engage in a living that deprives them of actually living. The most valuable asset we have today is time. You can make millions of dollars, but you can’t recoup the time lost.
While passive investments might take some work to get set up, the time rewards are overwhelming. Once set up, you can sit back, relax, and watch your profit margins rise.
The more revenue you get from your various passive income streams, the more time you get to relax and do things that matter.
Increased Profit Margins
You might think that investments not actively worked on might yield fewer results. Well, in passive investments, the reverse is the case.
A clear example of this can be found in passive real estate investments. While it might take some effort to set up, everything automatically falls into place once you’re up and running.
Now, you can take that vacation, spend time with friends and family without having to worry about your investments as you’ll be rolling in with hundreds and thousands of dollars every month.
Risk Diversification
It’s always advisable for you to have money from diverse income streams coming into your pocket. The reason being, it protects you against risks and the unexpected.
For example, if you have a job and that’s your sole source of income, you’d be caught unawares when the company you work for decides to close shop or terminate a select few. That, in turn, leaves you with nothing. Sadly many Americans face this reality.
Having a passive income stream will ensure that you remain stable financially, even when the worst happens. This move gives room for peace of mind, decreased stress, which gives a good quality of life.
Investing in Self-storage
Before taking that step, you have to decide on the self-storage unit you’re looking to base your business on. Some popular choices include drive-up units, non-climate and climate-controlled indoor storage, mobile units, and vehicle storage units.
Drive-up Units
Drive-up units are located at road fronts. They are excellent for customers who frequently want access to their space.
Climate-controlled Units
These are units required by clients looking to store antiques and other commodities that require temperature regulation.
Non-Climate-controlled Units
Non-climate-controlled units are best suited for clients who are looking to store valuables.
Mobile Units
Mobile units are portable storage spaces that can be transported easily on demand to the customer.
Vehicle Storage Units
Vehicle storage units are used to store vehicles ranging from boats, jet skis, motorbikes, and trucks. Investing in vehicle storage units is a good idea if you have lots of space to build on.
For every investment to succeed, you need to have an in-depth understanding, and the key to that is market research.
Investing in Self-storage
There are many ways to invest in self-storage. Finding the best self-storage investment opportunity that’s the right fit for you is usually a herculean task. Not to worry, we’ll be giving an extensive guide on how you can get the best; they include:
Storage REITs
This method is the easiest way to invest in self-storage. Purchasing shares from a Real Estate Investment Trust (REIT) is a passive investment alternative that requires the least amount of time before yielding dividends.
Developing a Self-storage Facility
Developing your self-storage facility is the most time-consuming, energy-sapping method in this industry. But if carried out properly, it can be extremely lucrative. However, it takes a high level of knowledge, experience, and resources to make this venture successful. Newly built storage units have the highest value currently in the storage market.
It is pertinent to note that while this is a welcome idea, building it just anywhere isn’t the right approach to take. You must take the market into consideration, size of the land, location of the land, and cost before building your self-storage facility.
Looking at similar REITs like Passive Storage Investing and following their designs would be vital. As you can either match or surpass their standards when it comes to having amenities such as climate controls.
Purchasing a Previously Owned Self-storage Facility
Buying a previously owned storage facility is one way to invest in storage. You avoid pitfalls that come with building your storage facility.
Significantly, go for a storage facility that has:
● Various unit sizes at different prices
● Buildings that are attractive and are well maintained
● Proper drainage systems to prevent flooding and freezing
● 24-hour automatic gate access
● Adequate lighting to ensure safety at night
● CCTV cameras
● A good website where the services you offer are advertised
While not all facilities come with all the above items, adding it would increase the facility’s value tremendously, thereby bringing in investors.
Conclusion
Passive investments are usually confusing to a newbie but fairly direct and should be considered an excellent platform for those seeking more income streams.
There hasn’t been a better time with the self-storage industry on the rise than now to invest. The industry is recession-proof, boasts good returns, and promises steady cash flow, which is vital to an intending investor.
