http://www.REIClub.com - Investing in Self Storage an be a Good Investment. Here’s a Quick Video on the Benefits and Risks of Self Storage Investments...
Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I’ve got quick video on risks and benefits of investing in Self Storage.
Self storage facilities share the same attractive qualities as other similar commercial real estate investing niches. Such as residential rentals, apartments, retail strip centers, office buildings, and industrial properties.
But Here’s The Difference::
- Self Storage Operating Costs are much lower
- Self Storage Investments loan default rates are significantly lower - banks like this
- Many ways to Profit - locks, boxes, & moving supplies, truck rentals
- Lien laws for Self Storage vs. Eviction Laws For Residential
- change locks and sell contents
- Virtually Recession Proof
- economy good = people buying new things, storing old things.
- economy bad = people downsize - need place to store excess
- No Tenants, No Water
- Being your own boss
- Significantly lower maintenance and operating costs
- High cash flow
- Same income, lower expenses = more profit
- the $ per sq. ft. is the same as other types of real estate investments
- Self Storage Deals are more appealing to Banks - funding is easier
- Tax advantages
- Cost segregation
- IRS changed the regulations to
- Increase Occupancy = appreciation, better market value
- Liability - theft, fire, structural - big insurance policy
- Poor Location - not enough traffic
- Poor Rent Analysis - may be to high for the area
- Poor Management - contributes to vacancy
- Inaccurate Property Valuations - overpaying - very common among new investors
- Non-payment and evictions
Self Storage Investments are one of the fastest growing areas of commercial real estate investing. The cash-flow potential can be rather lucrative, but just like all real estate investment deals, it all comes down to the management and the control of your profit margins. Any errors made in self storage investments, such as over-valuation, a bad location, high vacancy rates, are going to be far more detrimental to your bottom-line than residential.
Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you’ll be automatically notified when we upload more quick video tips for you. Take care and good investing.