Real estate investors make a lot of money by helping the American public store their junk. These people will not be at your local REIA events or seminars. Their most common meeting place is on the green or on a cruiseship. They quietly enjoy growing their cash-flow, and they are steadily building their networth through the almost unknown investment market of self storage. What is stopping the common real-estate investor from joining this exclusive group? read more helpful hints.
It is possible to perceive reality differently than you think. This is especially true for self storage. I believe investors are prevented from entering the self-storage business because they have false perceptions. Check out these myths and learn more about self storage.
Myth #1. There is a self-storage facility around every corner. With all the competition, it’s impossible to make money.
It’s true. Self storage is now a multi-use business. Over the past twenty-years, self storage has become a billion dollar industry. It is all about development and building. The United States has more than 45,000 storage facilities, which equals over 6 feet of storage for every citizen. There are still investors who can reap incredible returns, even in overbuilt areas. The key is to purchase an existing facility at the best price based in actual income and increase cash flow while operating the business efficiently.
I bought the first facility in Florida, in an overbuilt area. The occupancy rate of all the facilities in town was in the 75% range. After just 18 months, the occupancy reached 92% with a cash flow increase of almost $6,000 each month. My competitors were still in the 70-80% occupancy range. Don’t believe anyone who says you can’t make it in today’s market.
Myth #2. I can’t make any money unless I build or buy new facilities.
People assume self storage buildings are expensive because they are made of metal and have doors. They are more cost-effective than many commercial buildings. However, there are many other aspects to building and developing self-storage buildings. It is often a tedious process that can take months, if it not years, to complete. The result is a facility that’s empty and with a significant debt service. It might take years to breakeven and it is not easy to achieve success.
Smart investors purchase older, less-than-perfect facilities that are in dire need of repairs and are not being operated well. These properties don’t usually make it onto the radar of large companies and are available at great prices. These facilities are often able to provide a positive cash flow. After repairs have been completed, and it is professionally operated, the money can really start rolling in.