The Triple Advantage of Self-Storage Investing
When weighing an investment opportunity, investors tend to consider three primary goals: security, income, and growth. Most traditional investments provide only one or two of these. Self storage provides all three.
Depending on your life stage or long-term goals, it’s possible you’re more focused on one than the other. Older investors entering retirement may prioritize security, while young investors may be comfortable taking on risky opportunities in pursuit of greater growth.
Here’s a bit about each of the three primary investment goals, and how self-storage investing can help investors achieve all three.
Security
While there is never a guarantee of positive returns when investing, different types of investments present different levels of risk.
Cryptocurrency, for example, is a type of alternative investment that has the potential for high reward, but lacks investor security. It’s volatile, unregulated, and prone to cybersecurity risks.
If we look at the other end of the spectrum, bonds (especially those backed by the U.S. government) are considered to be the most secure type of investment. Barring extraordinary circumstances, you’re going to get your principal and interest back at the rate and time frame initially agreed upon. Bonds tend to make up a certain percentage of investor portfolios because they offer security. However, their rate of return is typically low and may not outpace inflation or meet your growth goals.
How Self-Storage Provides Security for Investors
You may be seeking a type of investment that can meet your capital preservation needs without diminishing your opportunity for growth. In other words, a “happy medium” between something as volatile as cryptocurrency and as stagnant as bonds.
When you invest in self-storage facilities, you’re investing in a hard asset: commercial real estate. This means, no matter what, you have a tangible asset that exists on a plot of land that will maintain some level of value over time. Unlike investing in a company, idea, or concept, there is virtually no possibility that the value of your investment can be wiped out completely.
This makes it an intrinsically safer investment than traditional stocks or other derivative investment types.
Income
One of the cornerstones of building significant wealth is to earn money beyond what you make while working. This is known as passive income.
When relying only on active income, you limit your ability to build wealth. Why? Because there are only so many hours in a week and only so much money an employer is willing to pay for your skillset.
For this reason, passive income is a key wealth builder — yet most types of traditional investments don’t provide investors with reliable and consistent income.
How Self-Storage Provides Income for Investors
Self-storage facilities benefit from low operating expenses, which helps investors receive regular income from their self-storage investment. As the demand for self-storage grows, more renters are willing to pay higher prices for use of these facilities — which can ultimately produce higher returns and more passive income for investors to enjoy.
Growth
One of the primary goals any investor has is growth. It’s the difference between putting all of your money in a savings account (maybe even under the mattress) or choosing to invest.
Growth is needed in order for you to both meet your greater financial goals, such as reaching financial independence, and preserve buying power.
Especially in periods of high inflation, storing your money in a low-interest bank account actually reduces and corrodes your purchasing power overtime. That’s why savvy wealth builders opt for investing with a diversified portfolio, which allows them to balance their opportunities for long-term growth while maintaining enough liquid assets to address today’s financial obligations.
How Self-Storage Provides Growth for Investors
Despite economic uncertainty and market volatility, the demand for self-storage continues to maintain pace after rising over the last three years. This creates attractive opportunities for individuals looking to invest, as evidenced by the high-yielding returns private investors have experienced when working with Belrose.
How Self-Storage Is Unique
The majority of investment vehicles can offer investors one (maybe two) of these primary goals. But self-storage facilities have proven to be investment opportunities that can address all three: security, income, and growth.
These facilities are cash-flowing real estate investments. Investors get to reap the benefits of commercial real estate investing without the high overhead, complicated tenant protection laws, or extensive facility maintenance and staffing. The property generates income, appreciates over time to help investors meet their growth goals, and has intrinsic value to provide security and stability.
Because consumer demand for self-storage does not run parallel to the economic cycle, it’s proven over the last several years to be a recession-resistant investment vehicle. For many looking to diversify their portfolios in 2023, this could create an additional advantage.
What Are Your Investment Goals?
Which investment goals are most important to you and your family? The good news is, self-storage facilities can help investors like you address these goals — especially in times of poor stock market performance.
If you’d like to learn more about alternative investments, we recommend signing up for our free investor portal. You’ll be the first to know about upcoming or current investment opportunities and gain access to premium content about self-storage investing.