Self-storage is always in demand. When the economy is high in a given area, many people will invest in new possessions, leaving them with the need to store their current possessions. When the economy is low, those same individuals may need to downsize their homes and other key expenses. Before diving in with self-storage investing, however, there are several things any investor should carefully consider.
1. Know the Market
Investing in self-storage units starts with understanding the current market. An interested investor should take a look at the current availability of self-storage units in the area. Is there plenty of availability, or are current self-storage facilities struggling to keep up with the demand? By better understanding the market, it’s possible to make more effective buying decisions.
2. Check the Property
Before purchasing an existing self-storage facility, investors should examine the property. Taking a look at current profits and expenses will give investors a good idea of the kind of return they should expect.
3. Evaluate Improvements
In some cases, investors will need to make improvements on their self-storage units after making the purchase. In order to determine accurate profits, it’s important to consider how much those improvements will cost and how long it will take them to start turning a profit. In some cases, improvements may make it possible for investors to raise the rent on their units. In other cases, the market will not support the corresponding increase in rent, which means that investors should calculate that difference before beginning their improvements. A careful evaluation of the market before buying can make it easier to determine how much of an increase the market will support.
4. Prepare Some Cash Reserves
Like any other type of property investing, self-storage investment may require some cash reserves, especially in the early days of the investment. Having these funds on hand can make it easier for you to weather any storms in the market.
Making the jump to self-storage investing is a big step, but it’s one that is often well worth it. If you’re ready to see a change in your investment strategy, consider investing in self-storage today.