The self-storage industry has continued to grow exponentially over the last few decades and has a reputation of providing high yields that are relatively resistant to recessions. The industry’s increasing popularity makes investing in self-storage an attractive option. Here are some of the advantages of investing in self-storage versus other commercial real estate properties.
The cost to maintain self-storage units is considerably lower when compared to office buildings or apartments. For example, self-storage units generally don’t need to be freshened up with new paint or appliances when tenants leave. Instead, when a storage unit becomes vacant, turnover usually involves clearing out the space for the next renter. Simpler buildings have fewer things that can break, resulting in a lower cost to maintain the property.
Thanks to a steady population growth and an increase in the residential rental market, the self-storage industry continues to expand, according to an IBIS World Research report. This demand has been spurred by a number of factors including the ease of ordering almost anything you want online. With more stuff comes a need for more room, however, baby boomers are increasingly downsizing as they reach retirement age. Millennials are also playing a role by opting to rent longer instead of investing in homeownership.
Nothing is recession-proof, but the self-storage industry is uniquely positioned in the market to thrive in both upturns and downturns. When the economy is booming, homeownership tends to increase, driving up the need for temporary storage in the interim. During a recession, self-storage still sees a demand thanks to the change in the market and people choosing to sell, downsize, or rent a more affordable property.
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