Although self-storage may not seem like the most appealing commercial real estate option, it does have one significant advantage over other areas: stability. Self-storage is becoming more critical as more people move to new places, change homes and acquire more possessions. This steady growth and expansion have attracted the attention of commercial real estate investors, who are interested in making self-storage a significant part of their portfolios.

Investors love the potential for growth, low overhead, and easy income that self-storage ownership offers.

A Growing Industry

According to most estimates, self-storage is a $38 million market. The self-storage industry has seen tremendous growth in the past decade, with construction spending on self-storage unit buildings increasing from less than 500 million to almost $5.5 billion in 2018.

As people and brands get creative about storing their self-storage space, there has been a lot of demand. As a result, the market offers more options for new builds and is attracting a broader market.

Secondary Revenue Opportunities

Self-storage offers a unique opportunity for those looking to invest in real estate. It provides a steady income stream and is an excellent option for anyone interested in investing in real estate. Nearly 10% of the US population has self-storage units.

Self-storage units can be very affordable, which means that tenants will pay the cost of the unit over months or even years. A self-storage facility owner can tap into new markets and generate additional revenue by minor upgrades or adding value.

Tenants can rent trucks for transportation or moving, which is a great way to make extra income and meet their needs. In addition, many self-storage facilities have dedicated showrooms that display different sizes of units. Owners can also cater to local businesses in order to attract new tenants.

Self-storage units offer another benefit: they are relatively easy to maintain and require very little staffing. This means that operating costs are low, and adding amenities don't often need significant cost increases.

Expanding to New Locations

Self-storage units tend to be built in urban areas, but there is an increasing demand for self-storage in rural and suburban communities. In addition, migration is occurring due to rising transportation and housing costs, particularly in the Northeast. Many people move from pricier areas like New England, New York, or New Jersey to more affordable, rural areas in the Midwest, Sunbelt, and Sunbelt.

Investors can expect to see growth opportunities from this expansion beyond urban centers. Investors who own self-storage facilities are seeing steady and solid income based on these new markets. For example, self-storage operators in rural areas may offer larger units to store boats and RVs during the off-season.

If you aren't ready for a significant investment, many properties can be repurposed.

Watch

Self-storage units are a safe and attractive investment for commercial realty investors. Self-storage units can be a reliable and secure entry point into the market, with the potential for growth and new opportunities in emerging markets.