Have you ever heard that real estate is always a good investment? It’s not. Just like any other trend, the real estate market has ebbs and flows and peaks in popularity. There are good times to buy and there are bad times to buy. If you’re not sold on the idea of fixing and flipping homes or trying your hand at being a landlord, have you ever considered commercial real estate? Storage facilities are an interesting choice and are seeing a rise in popularity for investors. Why is that, you might wonder? There are two main reasons.
1. Supply and Demand Will Always Exist
Humans are sentimental beings by nature, which means that we can have a tough time letting go of things. Think about all the personal items that you have stored in a box someplace because you can’t bear to get rid of them. Now apply that box to a full household of a retired couple that is starting to downsize, for example, or a young family who doesn’t yet know if they’ll need the crib and boxes of baby clothes again one day.
People will always have excess stuff, no matter how much Marie Kondo has helped in recent years. Storage facilities will always be in demand, which makes them a promising investment.
2. The Numbers Stay Relatively Constant
We all remember the crash of 2008 too well: Families forced to sell their homes (assuming they could sell at all) and move into something significantly smaller. Children being pulled out of daycares and private schools because tuition was simply too expensive. So many jobs lost and so few available to over-qualified individuals. It was a rough time and Americans had to pull together to carry each other through it. In the midst of all this sadness and loss, a surprising statistic arose: the National Association of Real Estate Investment Trust (NAREIT) reported that self-storage was the only REIT sector that saw a positive return: 5%, to be specific, and this accounted for dividends as well. An interesting concept, to say the least, so what could that mean to you as an investor?
Although self-storage is no “get rich quick” scheme, it is certainly worth taking notice of. If you’re thinking about buying some form of commercial real estate, buying shares in a self-storage facility might be a good bet for you. Research the benefits and drawbacks to make an informed decision so that you are making wise choices with your money.