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