A few real estate investors have been making a lot of money catering to Americans with their tendency to store junk. These people won’t be attending your local REIA meetings. The best place to meet them is on the fairway or on board a cruise ship. They are quietly enjoying growing their cash flow and building their wealth through the unknown investment avenue of self storage https://www.self-storage-hk.com/, or mini-storage. What prevents the average investor in real estate from joining this exclusive club of investors?
Reality is sometimes distorted and self storage is an example of this. I believe that there are false perceptions in the industry that discourage investors from investing in self storage. These are just a few of the many misconceptions you have about self storage.
Myth #1. Self storage facilities are available at every corner. I don’t have the money to compete with all of this competition.
Self storage is a growing business. It has moved from hidden garages in factories to modern multi-use facilities. In the past two decades, self-storage has grown into a multi-billion dollar industry. All of it is focused on building and development. There are over 45,000 facilities across the country, which means that every American has 6 feet of storage. But even in highly-saturated markets, there are many investors that can earn incredible returns. The key is to find the right facility and buy it at a reasonable price. Additionally, increase your cash flow by managing the business efficiently and effectively.
My very first facility was located in Florida’s overbuilt markets. Every facility in town had an occupancy of 75 percent or more. After just 18 month, the occupancy was at 92%. The cash flow increased by almost $6,000 per monthly. My competitors were still operating in the 70-80% occupancy range. Don’t be fooled by anyone telling you you can’t make any money in todays market.
Myth #2. To make money, you either have to build or buy another facility.
Because they are metal buildings with doors, self storage buildings seem to be relatively inexpensive to build. They are less expensive than most commercial buildings. But there’s more to building and designing them than meets your eye. In most cases, the process can be tedious and take months, even years to complete. The result is an empty facility, with a large debt servicing. It may take many years for a facility to break even. This is certainly not a path to quick success.
Smart investors are looking to buy older facilities that are not in good condition and require minimal repairs. These properties are often not visible to the large companies’ radar and can be bought for a great price. These facilities allow you to begin with a positive cashflow and then, once repairs have been made and the business is properly managed, the money starts rolling in.