The Self Storage industry proved resilient in the recent recession. During the recession, construction of self-storage facilities came to a screeching halt. Tight lending and apprehension regarding the future led most developers to wait and see what would happen. Compared to most other real estate investments, self storage fared very well.
If you are considering investing in self storage or expanding your current facility, consider this:
One trend never changes: change. Self storage thrives on change – people moving to new neighborhoods and new jobs, marrying or divorcing, starting small businesses, growing their families. During a recession, fewer units are being rented by homeowners moving from home to home or storing their possessions during a remodel. Instead, renters need storage due to home foreclosures, downsizing, or to make room to temporarily live with family. With the recession over in most areas, storage facilities are now seeing booming activity with increased home sales and moving activity.
Financing for self storage projects is readily available. Of all commercial construction, it’s still the investment that experiences the fewest defaulted loans. Because of this, banks continue to offer loan packages but are now requiring more from the developer. Expect to pay approximately 25% down for conventional financing, or as low as 10% with SBA programs.
In light of the performance of the self-storage industry, buyers are paying top dollar for existing facilities. Trachte’s knowledgeable staff can help guide you in building a facility that will be attractive to investors in the future.
There’s nothing steady about the stock market, especially these days. But self storage is a tangible investment, one that stands the test of time – especially during a recession. It’s an industry streamlined for success. Plus, it’s built to generate income right from the start while appreciating over time. And with a proven, experienced, smart self-storage building supplier on your side, profit potential has never been better.