• Skip to main content
  • Skip to primary sidebar

Cade Hildreth

Everything You SHOULD'VE Been Taught in School.

MENUMENU
  • Blog
  • Finance
    • Cryptocurrency
    • Real Estate
    • Gold and Silver
    • Investing
    • Increasing Income
    • Financial Q&A
  • Real Estate
  • Health
    • Fitness
    • Nutrition
    • Confidence
  • LGBTQ+
  • Podcast
    • "What You Should've Been Taught"
    • Audio Feed of the Website
    • Ask a Podcast Question
  • About
    • Testimonials
    • About Cade
    • Rugby Bio
    • Instagram
    • Contact
You are here: Home / Finance / Investing / Self-Storage Investing: How to Profit from Self-Storage Real Estate
Self-Storage Investing: How to Profit from Self-Storage Real Estate

Self-Storage Investing: How to Profit from Self-Storage Real Estate

November 8, 2022 By Cade Hildreth Leave a Comment

Why should you get started with self-storage investing? The self-storage market has created solid real estate investment opportunities with an average annual ROI of 16.9% since 2009, according to Forbes. And it’s maintaining strong industry growth despite the pandemic’s economic shake-up.

How do you get started in self-storage investing? There are only three ways to invest in self-storage facilities: buy stock in public self-storage companies, invest with a private equity firm that specializes in self-storage investing, or buy a physical self-storage facility and operate it yourself.

You can buy stock for as little as $10 to $100. You can invest with a private equity firm for around $25,000 to $100,000, depending on their minimum investment amount. Or, you can buy a self-storage facility for between $1 million to $3 million.

What are the benefits of self-storage investing? Along with flexible investment opportunities, there are many other perks that can make your money work for you.

Here are the top seven benefits of self-storage investing.

1. Large Self Storage Operators Are Acquiring Smaller Ones

When large companies buy small businesses, it creates more investment opportunities. Smart investors follow big business interests, including the market areas they inject with big money.

Blackstone recently bought Simply Self Storage for $1.2 billion, while Public Storage acquired ezStorage for $1.8 billion, according to the New York Times. And Edison Properties is reportedly looking to sell their Manhattan Mini Storage division for $3 billion.

These large-scale investments are heating up the market for self-storage. REITs are currently focused on snatching up these opportunities into their investment portfolios before someone else does.

And while the average investor won’t be dropping billions, this creates more public-traded stock investment opportunities.

2. Stock Price of Public Storage Operators is Skyrocketing

When analyzing long-term stock trends, you can see steady upward growth since the early 2000s. There was only a slight dip during the pandemic’s height before stock prices shot up to current all-time highs.

Public Storage (PSA) is the largest brand of self-storage services and was only $22 per share in 2000. On Nov. 2, 2021, it reached an all-time high of $337. The company also has a $58.2 billion market cap.

Other stock valuations experiencing record highs include:

  • Extra Space Storage (EXR): $13 in Jan. 2005, current high of $203
  • CubeSmart (CUBE): $16 in Jan. 2005, current high of $54
  • Life Storage (LSI): $26 in Jan. 2005, current high of $133

With the most accessible investing through stock, this represents prime investment opportunities for small investors. You can also diversify your portfolio by adding self-storage for real estate investing.

3. U.S. Self Storage Industry is Booming

The modern self-storage model began in the 1960s, with a small family-owned business in Odessa, Texas. With a current $39.5 billion in annual revenue, the self-storage industry today is nationwide and flourishing.

The booming self-storage market is uniquely American as well. The U.S. boasts over 58,000 self-storage facilities, according to Self Storages University. But only 12,000 exist globally apart from that.

Self-storage facilities in the U.S. also total more than Starbucks (15,209), Subway (21,240), and McDonald’s (13,683) combined. However many Starbucks and McDonald’s that appear to be everywhere, there are even more self-storage units being low-key.

4. More Financing Opportunities for Investors

Self-storage is currently a fragmented market. More than 30,000 owners run the 55,000+ storage facilities, according to the New York Times.

Fragmented markets can cause unstable stock prices and investor upset. But the self-storage market’s steady growth has counteracted this effect.

A fragmented market is a boon to investors who want to buy self-storage facilities. There are lower barriers to entry and higher opportunities for strategic disruptors.

There are also prime financing options. The SBA 405 loan has transformed the self-storage market through more accessible financing, according to Forbes.

A 405 loan offers up to $5 million with only 10% down. The SBA approved over $8 billion for 9,600 loans in fiscal 2021.

5. Self-Storage Market Remains High During Economic Lows

Some of the hardest-hit industries are still reeling from the pandemic. The energy and industrial sectors had some of the worst stock market dips from February to April 2020. Even real estate stock performance took a dive.

The self-storage market weathered the economic storm, however. Self-storage REITs still reached a record 95.3% occupancy rate and 12.91% ROI in 2020.

The need for self-storage units remains steady due to the nature of the industry. Although the reasons may differ between economic highs and lows, the demand doesn’t dip.

Demand drivers during tough economic times include:

  • Moving from job loss
  • House downsizing
  • Family loss
  • Divorce
  • Displacement

Demand drivers during a strong economy include:

  • Moving through job opportunity
  • Remodeling a house
  • Selling homes
  • Combining households
  • Consumer buying

Unbelievably, over 10% (13.5 million) of U.S. households are renting a self-storage unit. And the compound annual growth rate (CAGR) is currently projected to be 134.79% between 2020 and 2025, according to Forbes.

6. Diverse U.S. Customer Base Mitigates Risks

Just like diverse demand, a diverse customer base helps keep industry growth steady. When businesses mostly rely on one segment of a population, they’re more vulnerable to the upsets of that population.

Over 35% of self-storage renters live in single homes, according to StorageCafe. Surprisingly, a significant chunk of these homes has a garage (66%), an attic (50%), and/or a basement (33%).

Baby Boomers and GenXers currently dominate the self-storage renter demographic. But Millennials still make up 39% of storage demand, which means they aren’t likely going to be many articles about how Millennials killed the self-storage industry.

7. Americans Have a Clutter Problem

Shopping has always been an American pastime. The rise of Amazon and other online retail markets has driven consumer buying to new heights. U.S. households buy a whopping $1.2 trillion’s worth of unneeded items a year, according to WSJ.

America’s clutter problem has resulted in 300,000 items for the average American home. This empowered buyer overflow has spilled into self-storage. And all this stuff has negative effects on people and their relationships, according to research.

But as clutter grows, the demand for self-storage grows with it. Large and prosperous households need self-storage as much as families in adverse conditions.

Ready to Start Your Self-Storage Investing Journey?

Self-storage investing can be a powerful investment opportunity for anyone, from small investors to small business owners. Americans love stuff, and investors love industries that can remain strong during weak economic conditions.

Want to stay in the loop? Join nearly two million other readers who are learning how to increase their income, invest in real estate, improve their health, and so much more.
Are we connected on social media? If not, let’s do it so I can share in your world too: Instagram | Twitter | Facebook | Pinterest | TikTok | LinkedIn | Podcast
5/5 - (2 votes)

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)

Filed Under: Investing, Real Estate

Reader Interactions

Tell Us What You Think! Cancel reply

Primary Sidebar

  • Instagram
  • Twitter
  • Facebook
  • LinkedIn
  • Pinterest
  • TikTok

“As an LGBTQ+ entrepreneur, real estate investor, former USA Rugby Player, and fitness fanatic, I’ll teach you what your parents and teachers should’ve taught you, but didn’t know themselves.” -Cade Hildreth

Want to know what I learned making my first few million? Subscribe here.

Or, listen to Cade’s articles on the go as a Podcast.

The secret to fitness is… …Hill sprints with The secret to fitness is… 

…Hill sprints with my pal, BEANE!!! Lol (scroll to see it live ➡️)

Just kidding, I’m sure lifting has a bigger effect. But seriously, how does he do the whole sprint staring at me instead of where he’s going, running backward, and jumping in the air?!?

Do you have pets and what do they do to make you smile? 🙂

(And side note, should my wife and I take up pickleball like everyone keeps telling us to? 🤔)
Covid era poll: How many of your work from home th Covid era poll: How many of your work from home these days and is it part-time or full-time? 🤔 

(And side note, do you prefer look #1 or #2?)
Did anyone teach you about the question words? Let Did anyone teach you about the question words? Let me know… ✅❌🫣🤔
This #trans couple will be the first known parents This #trans couple will be the first known parents to welcome a baby born to a #transman in India. Congrats to Ziya and Zahad! 🏳️‍⚧️💙🍼

Read the article at: https://lnkd.in/gUErqRhT

Source: @paval19
With anti-LGBTQ+ and anti-trans legislation on the With anti-LGBTQ+ and anti-trans legislation on the rise, I have enormous RESPECT for people for are taking action to support our communities. 🏳️‍🌈🏳️‍⚧️

Putting this into action are Dr @EricCervini, an author and historian, and his partner @Adam_Powell. Together they will be driving a bus full of banned #queerbooks across the U.S., starting this summer! 

I absolutely love this idea—and can't wait for them to swing by Virginia! 

From an article shared on XtraMagazine.com:

“With LGBTQ2S+ books under attack in the U.S. at record rates, author Eric Cervini and his boyfriend, actor Adam Powell, knew they wanted to take action. While others are organizing with protests, drag queen story hours, days of reading and other important acts of resistance, Cervini and Powell have their own spin on what to contribute to the movement—and that spin has wheels.

The pair are working on buying, then building, what they call the Rainbow Book Bus, a bookmobile carrying queer and trans books to small towns. 

After reaching their crowdfunding goal of USD $100,000 at the end of December, Cervini and Powell are now able to pay a specialized company to retrofit a school bus to become a beacon of queer literature. 

‘Our goal is to have at least an early version of it ready by Pride [in June],’ Cervini tells Xtra. ‘We want to have a bus that is converted—it may not be fully decked out, but it will be functioning as a travelling book shop/book fair—in the summer of 2023.’”

If you'd like them to visit your town, share it in comments! 🌈🚌

Image Source: Eric Cervini and Adam Powell

Article Link: https://xtramagazine.com/culture/queer-book-bus-eric-cervini-243787

You can also support them at @shopqueer.co! 🌈📚

#lgbtqia #lgbtqcommunity #trans #lgbtqyouth #transyouth
“You are who you choose to be.” -Carl Jung T “You are who you choose to be.” -Carl Jung 

This past summer we took a trip to Madden’s resort in MN to celebrate my parents 50th wedding anniversary with my parents, sister, brother in law, wife, niece and nephew. 

It was actually their 52nd, because we had to postpone it twice due to Covid! 🌊🏖🐟
Load More... Follow on Instagram

Recent Posts

Gender Spectrum

Gender Spectrum: A Scientist Explains Why Gender Isn’t Binary

Real Estate Syndicators

Master List of Real Estate Syndicators for 2023

How to prove you are an accredited investor

How to Prove You Are an Accredited Investor?

Get into real estate

8 of the Easiest Ways To Get Into Real Estate in 2023

IRR vs ARR

IRR vs. ARR: What’s the Difference?

Categories

  • Biohacking
  • Confidence
  • Cryptocurrency
  • Entrepreneurship
  • Exclude
  • Finance
  • Fitness
  • Gold and Silver
  • Increasing Income
  • Investing
  • LGBTQ+
  • Nutrition
  • Podcast
  • Real Estate

Ask a Podcast Question | Contact Us | Terms of Use | Privacy Policy

COPYRIGHT © 2019 · CADEHILDRETH.COM | PHONE: ‪(202) 660-4705‬  | 800 CORPORATE DRIVE, SUITE 301, STAFFORD, VA 22554, USA

 

*Disclaimer: Nothing on this site should be construed as medical, health, or financial advice. Before making any health decisions, you should consult with your doctor. Before making any financial decisions, you should consult with professional adviser, such as a financial planner or CPA.