Self-storage offers entrepreneurs, developers, real estate owners and investors the opportunity to diversify their investments with relative safety and confidence. The self-storage real estate sector has proven to be one of the, if not the most, robust real estate segments over the past decade, confirming its attraction and resistance to the economic downturn.
Self-storage as a good diversification solution
Portfolio diversification is vital to a successful investment strategy. ‘Diversification’ is the key word here and self‑storage is a differentiating asset class compared to the more traditional real estate asset classes such as office, commercial and industrial. Self‑storage brings some unique benefits that deliver a robust financial proposal and illustrate why se-lf‑storage is a good diversification solution.
Return on investment
In developing markets, self-storage companies are typically producing double digit annual returns. With its robust stabilization characteristic, good returns nearly always continue over the life of the investment. This is often why many self-storage owners/investors stay with their investment over the long term despite attractive third-party offers.
Growing your self-storage investment
The initial investment grows as your self-storage facility starts filling up rapidly and the need to expand is on the horizon. Your next building acquisition will typically be funded from cash flow of your existing self-storage business. Early on, when you only have a single or few sites, it’s likely that you’ll need a top up. At this stage you may want to bring in other investors.
Source : Steel Storage