Category Archives: Higher Yield

Desire Investment Alternative…Consider Self-Storage

 Issue 94 – Investment Alternative

Introduction…”The bottom line is that if we go into a bad housing market, people have to put their stuff somewhere,” says Mednick, who is also president of the Orange County Real Estate Forum investors club. “When the economy is good and people buy too much stuff they have to put it in storage. You’re winning as the market goes down, and winning as the market goes up.”

A “safe” investment… For those investors looking for an alternative to being a landlord, self-storage is considered a relatively safe real estate alternative.

Self-storage is monthly rentals of interior spaces made up of concrete floors with steel or concrete walls.  That’s it.  Once a renter moves out, the manager can just blow out space and rent again.  Our make ready is a leaf blower.

If the renter fails to pay rent, then the property can be sold at auction to recoup all or part of the lost rental income including late fees.  In fact, this last Texas legislative session codified online auction as an allowable sale method.

The secret…It is a contrarian approach to the commercial real estate, but generally, our leases are month to month.   If we had a term lease, like most commercial real estate, then at the end of the term renters would be planning to move out.  With the month to month leases, there is no rush to move out.  They can always move out next.  And maybe five or ten years later, they will still be moving out next month.

In summary…Self-storage is a simple, but elegant alternative to other more complicated residential or commercial real estate.  To learn more and “Get 9 Little Know Secrets For Steady Real Estate income FREE” subscribe above right.

Source:  Joel Cone, “Self-Storage Is An Investment Alternative,” U.S. News Money, 11 Jan 2018

Investors…Consider The Uncomplicated Self-Storage

 Issue 85 – Uncomplicated Self-Storage

Introduction...The uncomplicated world of self-storage recently became the most desirable way to invest in commercial real estate.

Two examples...

  1. One Fort Worth owner had is property 95% leased when a buyer came along and asked if he’d sell.  The owner estimated his property value to be $4,000,000.  When the offer arrived at $5,500,000 the owner said, “SOLD!”
  2. Another owner had accumulated 20 smaller properties in Texas and New Mexico. He was very happy with the management and the cash flow.  Until a California investor wanted to jump into the market and offered $25,000,000.  Again, this owner “SOLD!”

Why so much interest in self-storage…In the past apartments were considered the most desired way to invest in real estate.  However, there are many good reasons to branch out.

Self-storage has proven to be recession proof.  During boom times we buy more stuff to store.  During contraction when we are downsizing, we tend to store our extra stuff rather than sell it.

In a recent issue of the Self-Storage Insider, we reported…The Commercial Mortgage Backed Securities (CMBS) self-storage loans funded over the past 10 years have the lowest default rate of all property types at less than 1 percent.

In conclusion…Do you have self-storage in your portfolio?  If not, let us give you more insider information by contacting us at bill@billmoist.net.

Why Self-Storage Investors Are The Happiest

 Highlights From Annual TSSA Conference

Introduction…The 2017 Annual Texas Self-Storage Conference was an amazing event.  The content shared was first class and meeting the participants was a real joy.

Click here to watch the rest of the story.

 

Announcing Increased Cash Flow For Storage Investors

 Issue 67 – Increased Storage Cash Flow

Introduction…This is an exciting time to be a self-storage owner or investor.  We have multiple ways to decreasing operating costs and increasing positive user experience.

Here are current items that improve cash flow for owners or investors:

  • Online payment processing
  • Online unit availability and lease execution
  • Smartphone online leasing
  • Gate access with smartphone
  • Unmanned properties with Advanced Kiosk
  • Enhanced data track-ability and analytics
  • Paperless operations reduce management expenses and provide improved search ability
  • Improved customer experience by providing information access as they want it with websites, software, gate access, payment processing, and facility marketing.

In summary…Much of the above technology improvements to customer experience are so affordable.  The labor saving and speed to lease or collect payments greatly exceeds its cost.  This is an exciting time to be owners and investors in self storage properties.  To request more information, email bill@billmoist.net

How the Small Local Company Can Beat the Large National Company

Introduction…Analogy:  How does the small weaker army beat a large stronger army?

The small army take advantages of its strengths and exploit the weakness of the larger army.

The small army is nimble, quick to make change, can attack and then hide.

The large army is slow to move, slow to make change, can’t hide.

After repeated gorilla style attacks, the small army captures many armaments of the larger army.

The same strategy can be applied to a small local self-storage company competing against the larger highly capitalized national company.

In fact, in my example, the smaller company is a much older property in need of a facelift and yet it competes and often beats the larger but slower to react national company.

Here are three examples of how one company is doing just this.

  1. Better sign up deal…The big company has on month free, but it’s not the move in month, plus they have fees for locks, deposits and insurance. So, it ends up costing the customer several hundred dollars to take advantage of one month free. The smaller company has a true $1 first month move-in special.  The first month costs the tenant $1.  Easy choice if short on cash.
  2. The industry experts say that social media does not work for self-storage so most don’t use it to get new tenants. The manager of the small company places Facebook ads in groups seen by 1,000’s of people each week in places they are looking for things they want.  Groups Like…
  • Garage sales listings
  • Antique sales listings
  • Flea markets listings
  • Small dealers of household items

From these free Facebook ads, the smaller company gets ten new customers a  month.  For FREE.

  1. The smaller company’s property is one-fourth the size of the bigger company. That might seem like a disadvantage, except the manager of smaller company knows and loves all of his tenants.  I have not met a more enthusiastic manager at any property regardless of its size.  His enthusiasm is offer enough to get you to sign.

In conclusion…Being big has its disadvantages and being small can have its advantages.  It is the wise small company that understands and exploits its advantages.

Why Baby Boomers Love Self-Storage…Revisited

 Boomers Driving Self-Storage Demand

Introduction…One major force driving the demand for more self-storage are the boomers.  The boomers are those born between 1946 and 1964 whose age range between 51 and 69 in 2015.  Almost nine months after World War II ended, the cry of the baby was heard across the land.  More babies were born in 1946 than ever before in the U.S.: 3.4 million.  This was the beginning of the baby boom.

There were 76.4 million “baby boomers” in the United States and they made up 40% pf the nations population.

As the boomers grew older, every segment of the economy was impacted from the selling of baby products, building schools, building automobiles and houses.

Bulidng Self-Storage for Boomers…Now we are building self-storage because the boomers were the most prosperous generation we had ever seen  and represent $2 trillion in spending power.  Is it any wonder they have more stuff than any previous generation.

Now that they are getting to the age where they are beginning to start downsizing, they still have more stuff to store.  So, rather than getting rid of those things they worked to obtain, many are choosing to store it.

In Summary...Nearly 1 in 10 American household uses one of the 50, 000 self-storage facilities.  And now the boomers are increasing demand for self-storage like we’ve never seen before.  Is it any wonder that experts predict it will be 2022 before the industry meets the demand for self-storage?

Click here to “Get 9 Little Known Secrets For Steady Real Estate Income.”

Investing In RV/Boat Storage: Five Questions To Ask First

RV/Boat Storage

Introduction...Ask any boat or RV owner and they’ll tell you: Finding a place to store those vehicles can be tough. Homeowners’ associations hate seeing them in driveways; cities ticket them when they’re parked on the street; and apartment-complex managers don’t take kindly to sacrificing their limited parking.

There is a great opportunity for self-storage business owners to expand our business thanks to the growing demand in RV and boat storage and the low supply thereof. There are five questions one should ask when adding these storage units to our new or existing self-storage business.

1. Why Should We Offer Boat/RV Storage?

The first thing we’ll want to ask ourselves when considering the addition of boat/RV storage is whether it’ll be profitable. In most markets, it will. The main reason is the scarcity of the service.

2. What Type of Boat/RV Storage Should We Offer?

The great thing about adding boat/RV storage to your facility is it won’t necessarily cost a fortune. Besides tailoring it to the needs of future consumers, you can modify it to fit your budget.

There are essentially three types of boat/RV storage, ranging from simple to luxurious. The most basic form is a simple parking lot with spaces available for rent. If we have land you can pave or an existing parking lot that rarely fills up, converting it to storage should be easy. Simply use paint to designate rental spots and number them accordingly.

One step up from parking-lot storage is canopy storage. This type features a roof only or a roof and walls on two or three sides. It’ll cost a little more, but it’s a worthwhile investment if you live in an area where it snows or you get excessive sun; tenants will be happy to know that a canopy is protecting their vehicle from the elements.

If we want to cater to customers who expect luxury, you can offer fully enclosed units. These feature high clearance for even the tallest of vehicles as well as roll-up doors, dependable locks and even unit alarms. If you live in an area where you see many high-end boats and RVs, this type of storage will guarantee you business.

3. What Basic Features Do I Need?

Installing boat/RV storage won’t require you to change everything about our facility, but it will necessitate a few tweaks. The most important thing you’ll want to offer these tenants is space—not just to park but also to drive. We’ll need drive aisles that are at least 35 feet wide to accommodate large motorhomes and vehicles that are towing boats or a fifth-wheel trailer. By giving vehicle owners that extra room, you’ll not only improve their storage experience, you’ll prevent them from potentially damaging your property.

4. What Amenities Should We Offer?

If we really want to go the distance, there are a number of additional features and services we can offer. Wash and dump stations, propane sales, vacuums with long hoses and even air pumps are outstanding amenities that are likely to result in consumers choosing your facility over another. Providing electrical hookups in units will wow tenants as well.

5. How Do We Attract These Tenants?

They’re probably already looking for us! All we have to do is let them know we exist. Prioritize Web-based marketing over older techniques such as print advertising. Use our website by including quality photos of your property as well as a detailed list of amenities you offer specifically for boat and RV owners. Use the same terminology on our website that boat/RV owners use, as this will help your facility place higher in online searches.

In conclusion...With increasing numbers of people eager for a taste of life on the road (or sea), RV and boat storage is more desirable than ever. Fortunately, supply hasn’t caught up with demand—that’s where we come in and can create great cash flow.

Five Questions To Ask First About RV/Boat Storage

RV/Boat Storage

Introduction...Ask any boat or RV owner and they’ll tell you: Finding a place to store those vehicles can be tough. Homeowners’ associations hate seeing them in driveways; cities ticket them when they’re parked on the street; and apartment-complex managers don’t take kindly to sacrificing their limited parking.

There is a great opportunity for self-storage business owners to expand our business thanks to the growing demand in RV and boat storage and the low supply thereof. There are five questions one should ask when adding these storage units to our new or existing self-storage business.

1. Why Should We Offer Boat/RV Storage?

The first thing we’ll want to ask ourselves when considering the addition of boat/RV storage is whether it’ll be profitable. In most markets, it will. The main reason is the scarcity of the service.

2. What Type of Boat/RV Storage Should We Offer?

The great thing about adding boat/RV storage to your facility is it won’t necessarily cost a fortune. Besides tailoring it to the needs of future consumers, you can modify it to fit your budget.

There are essentially three types of boat/RV storage, ranging from simple to luxurious. The most basic form is a simple parking lot with spaces available for rent. If we have land you can pave or an existing parking lot that rarely fills up, converting it to storage should be easy. Simply use paint to designate rental spots and number them accordingly.

One step up from parking-lot storage is canopy storage. This type features a roof only or a roof and walls on two or three sides. It’ll cost a little more, but it’s a worthwhile investment if you live in an area where it snows or you get excessive sun; tenants will be happy to know that a canopy is protecting their vehicle from the elements.

If we want to cater to customers who expect luxury, you can offer fully enclosed units. These feature high clearance for even the tallest of vehicles as well as roll-up doors, dependable locks and even unit alarms. If you live in an area where you see many high-end boats and RVs, this type of storage will guarantee you business.

3. What Basic Features Do I Need?

Installing boat/RV storage won’t require you to change everything about our facility, but it will necessitate a few tweaks. The most important thing you’ll want to offer these tenants is space—not just to park but also to drive. We’ll need drive aisles that are at least 35 feet wide to accommodate large motorhomes and vehicles that are towing boats or a fifth-wheel trailer. By giving vehicle owners that extra room, you’ll not only improve their storage experience, you’ll prevent them from potentially damaging your property.

4. What Amenities Should We Offer?

If we really want to go the distance, there are a number of additional features and services we can offer. Wash and dump stations, propane sales, vacuums with long hoses and even air pumps are outstanding amenities that are likely to result in consumers choosing your facility over another. Providing electrical hookups in units will wow tenants as well.

5. How Do We Attract These Tenants?

They’re probably already looking for us! All we have to do is let them know we exist. Prioritize Web-based marketing over older techniques such as print advertising. Use our website by including quality photos of your property as well as a detailed list of amenities you offer specifically for boat and RV owners. Use the same terminology on our website that boat/RV owners use, as this will help your facility place higher in online searches.

In conclusion...With increasing numbers of people eager for a taste of life on the road (or sea), RV and boat storage is more desirable than ever. Fortunately, supply hasn’t caught up with demand—that’s where we come in and can create great cash flow.

Source: Interested in Embarking on Boat/RV Storage? Insider Self-Storage, July 14, 2016

RV Owners’ Storage Shortage Crisis

rv storage

The pressure is on owners  to find place to store recreational vehicles (RVs).  Very few American  neighborhoods will alow RVs to park near the owners’ home.

Over 2,000 RV owners have been notified by Flying Bull RV storage that they must vacate the property by January 31, 2017.  The rush to find available storage space in the Irvine is on.

The city, which owns the land, is ending a month-to-month lease with Flying Bull to make room for the completion of the Great Park, a large residential and commercial development, said city spokesman, Craig Reem.

The closure is expected to worsen the current shortage of RV storage in Orange County.

“This is going to be a crisis for RV owners,” said Ted Deits, owner of the Eucalyptus at Beaumont RV Storage Condominiums in neighboring Riverside County.

Deits said because of the severe shortage of RV storage space in the region, the closure of Flying Bull will likely trigger a spike in storage costs.

Finding space for the more than 2,000 RVs that are leaving Flying Bull is like trying to relocate a small city, Deits said. With land costs in Orange County rising, it’s unlikely that anyone will open new facilities to accommodate the evicted tenants. As suburban land is developed, fewer suitable locations for RV storage are available.

Our takeaway…There are two insights we can learn from this notice to vacate the RV storage:

  1. RV and boat storage may be a cash flow use of certain tracts of land, but our month-to-months allows us to trade the land if another use is a higher and more valuable
  2. RV and boat storage is in high demand in many parts of the country

Summary...In some parts of the U.S. demand high and the supply is short is for RV and boat storage.  A tremendous opportunity exists for us to create significant cash flow for this type of storage and possibly sell the land at a later date when the demand for a higher more valuable use exits.  This could be a the best of both worlds for storage owners and partners.

Click here to get “Get 9 Little Known Secrets For Steady Real Estate Income  
FREE.”

Avoid Average Investor Sink Holes

InvestorSinkHoles

By: Bill Moist, MS, CPA

Introduction…Misinformation is the worst enemy of those planning for retirement.  Here are three critical items you have not been told before by the news media.

  1. Here is a shocking report according to Dalbar Research- the company that researches the Mutual Fund industry. The average annualized returns over the last 20 years:
  • The stock market has increased 4.9%
  • Junk bonds 8%
  • The average investor (asset allocation model) annualized 2.1%
  • Inflation averaged 2.2%
  1. How did the most left leaning election 4 years ago affect the market?
  • Dow then 14,000
  • Now 18,400 (a 31% increase)

Job growth

  • Before the great recession 140 million jobs
  • Now 150 million jobs
  • Now 5.5 million jobs unfilled and many of these are good jobs.

Not arguing for a left leaning government, but those changes

tend to be longer term.  In comparison, we are still less left

leaning than Europe or Asia.  U.S. investing has become a

safe haven for foreign investors.  Recommendation…Avoid

making financial decisions solely on election returns as it’s

not intuitive.

  1. The best asset classes 15 year returns in order:

Click here to watch the video  Avoid Average Investor Sink Holes.

Real estate investment trusts (with self-storage REIT at the very top of the list)

  1. Emerging market equity
  2. High yield bonds
  3. Small cap
  4. Large cap
  5. Asset allocation funds- what average investor uses

Conclusion…These rankings change with the time being calculated.  But, real estate has been the top performer for 20 years. And Self-storage REITs have been the best segment in that class.

Take action now… You owe to yourself to find out how one of the Forbes 400 built his fortune on self-storage.  To discover what he knows, click here to “Get Little Known Secrets For Steady Income” FREE.  At self-storageinsider.com

Reference:  Networth Radio Show, Spenser McCown Group, August 26, 2016

This is Bill Moist, MS, CPA speaking Avoid Average Investor Sink Holes