Why Self-Storage is Better Than Other Real Estates
Over the past few years, self-storage has become a hot market. Though it has been around for a long time. According to the Sparefoot, there are now over 1.7 billion square feet self-storage facilities nationwide. That is an estimated 45,000 to 60,000 facilities throughout the United States. For small and private investors, self-storage is one of the best real estate investments they can make. In this article, we will discuss why self-storage is better than other real estates.
How Self-Storage Works?
Before diving into the discussion of why self-storage is better than other real estates, let us first understand how it works. If you are one of many Americans whose stuff does not fit into your home, self-storage is perfect for you. Whether it may be clothes, books, appliances, self-storage facilities offer you a secure place to store your belongings. Especially those things that you do not need right now, but you cannot throw away.
With self-storage, you are leasing space. Usually, it is monthly. However, there are several types of self-storage facilities. Various facilities are depending on the customer’s needs.
Types of Self-Storage
Indoor Self-Storage Units
Indoor self-storage units are located inside a large building. Oftentimes, on multi-story buildings. It is typically set in urban areas since they are smaller. Moreover, they are usually inside multi-level structures that can be easily accessed by stairs and freight elevators. They give an experience of like storing things in a walk-in closet or home offices.
Outdoor Self-Storage Units
On the other hand, outdoor self-storage is units that are grouped in outdoor buildings. Typically, with roll-up doors that you can access outside. This is the traditional type of self-storage facility where you can find the largest units. It is commonly used for storing large items, vehicles, or storage during a move.
Climate Control Storage Units
What if you need to store items that can be damaged by humidity? Documents, books, clothes, electronics, and furniture just to name a few. The climate control storage unit is the answer. This kind of unit has a heating and cooling system that regulates temperature and humidity levels.
Non-Climate Controlled Storage Units
This type of storage unit is the exact opposite of the latter. This is a regular storage unit without heating or cooling system.
Storage Unit Sizes
Storage units come in different sizes. A standard storage unit has a ceiling height of 8’. The other typical sizes in the market are 10×10, 10×15, 5×5, 5×10, and 5×15.
Why People Use Self-Storage?
There are lots of reasons why people use self-storage. This is one of the main reasons why self-storage is better than other real estates. The demand will always be there.
- Relocating Home or Office – This is probably the most common reason why people use self-storage units. Relocating can be a stressful move especially if you cannot bring all your stuff in one go. You will be needing a temporary and secure place to store your stuff while working on moving other stuff.
- Business and Commercial Needs – Business usually needs space, particularly e-commerce. They will always need a space to put their stocks and items into. Storage units offer a cheaper option to those small businesses that cannot afford to lease bigger office spaces.
- Renovating Home
- Safe Place for Vehicles or Equipment
- Temporarily working away
- Archiving documents
- People simply need more space
Why Self-Storage is Better than Other Real Estates?
Self-Storage Industry Does Not Get Affected by Economic Downturns Easily
Most businesses get affected by economic drivers. Especially with the pandemic going around. Even real estate investing got affected by Coronavirus, too. One good thing about self-storage is that whether the economy is performing well or bad, people will always need storage units. During good times, people continue to buy things that cannot be consumed. Namely furniture, toys, appliance, and others. And for some reason, they find it hard to throw these items. Now when the economy is in recession, people tend to downsize. And this time, they will need storage units again to store their excess items.
Stable Cash Flow
Since the self-storage industry does not get affected by economic drivers, investors enjoy the stable cash flow. In addition, self-storage units are used in many ways. People need them for various reasons. Thus, the demand will always be there. The statistics of American who use self-storage is rapidly increasing. From 6% in 1995, the American household that rents storage units are up to 10%. This is according to the Self-Storage Association. Besides, the month-to-month rental allows rental rates to increase.
Low-Cost Maintenance
Compared to multi-family, single-family, or even office spaces, a self-storage facility is relatively cheaper to maintain. After a tenant vacates the unit, there is no need to exert effort in preparing the unit for the next tenant. Just a clean sweep and the unit is ready for the next renter. Unlike with apartments and office spaces where you need to do turnover cleaning and repairs (if there is any).
Growing Demand
As mentioned above, there are now over 1.7 billion square feet of facilities nationwide. The industry alone has an average annual revenue of $39 Billion as of March 2020. With 9.4% of U.S households renting storage space. There is no doubt that the demand for storage spaces will grow more. This data alone explains why self-storage is better than other real estates.