Alternative investment has grown immensely popular in recent years. A lot of people are now looking for different ways to invest their money, and alternative investment offers lots of opportunities. People have been investing in property for many years.
But recently, investing in alternative forms of property has become more common. From mobile homes to retirement flats, there are lots of things that you can invest in. One that has become particularly popular is storage units.
If you have ever seen an episode of Storage Wars, then you will be familiar with what a storage unit is. But, you might never have thought about investing in them.
Before you even consider this, you probably want to know whether, or not, storage units are a good investment. In this guide, we’ll be taking a look at everything you need to know about investing in storage units. So to find out more, keep on reading.
What are Storage Units?
First things first, let’s take a look at exactly what storage units are. Storage units, or self storage as it is often sometimes known, is an industry in the market designed to offer people more space. Storage units are usually large buildings, or large areas of land, where people can either rent a storage unit or a storage area.
Your area will be sealed with a large shutter door, and you can then use the area within it to store whatever you want. Whether that be your Christmas decorations once the festive period is over, or business equipment that you don’t want taking up room in your home.
When you rent a storage unit, you become a tenant. So, it is important to note that you are not investing in a storage unit if you are simply renting it. In order to invest in storage units, you will have to either purchase a block of units yourself, or invest in a company that rents them out. If you are renting a storage unit, you are simply a customer, you are not an investor. This is something that does cause some confusion, so it is very critical to know the difference.
As storage units are a relatively new form of investment, they are something that a lot of people are still wary of. So, if you are considering investing in storage units, you probably want to know if this is a good idea before you get started. Let’s find out.
Are Storage Units a Good Investment?
In order to understand whether, or not, storage units are a good investment, you need to really understand what is happening with storage units. In recent years, storage units have become more and more popular, and the number of people who are taking out rental agreements for them is growing steadily.
Over the past few years, a number of things have happened in the world, and now more people are looking for space to create home offices, and also to down-size. For both of these things, it is likely that you will need a storage unit to keep the belongings that you have removed to create space in. This is why more people have begun to take out rental agreements for storage lots.
Based on this, we would say that storage units are a good investment. While you will not make much money on the storage unit itself, in terms of equity, you will make a substantial amount of money from renting them out. But just how much money can you make when investing in storage units? Let’s take a look.
How Much Money Can you Make Owning Storage Units?
Before you invest in storage units, it is likely that you want to know how much money you can make off of it. After all, when you invest in something, you usually have to spend a lot of your own money on it, so you want to ensure that you get a good return on your investment (ROI).
Generally speaking, you can make a good amount of money from investing in storage units. But, it is impossible to state the specific amount of money that you can make from this because a number of factors influence it.
There are lots of different things that influence the amount of money that you can make when investing in storage units. The biggest factor that influences this is location. Across the USA, there are simply some areas where storage units are higher in demand, and because of this, owners can charge more for rent on these units.
In particular, storage units tend to generate more money in the States of New York, Arkansas, and Maryland. Simply because they are in higher demand. Typically speaking, you can make between $361,000 and $799,000 a year by investing in storage units. So, as you can see, they are actually a pretty good thing to invest in.
Is it Worth Buying Storage Units?
It is clear that you can make money on storage units, but just because the ROI is pretty good, this still doesn’t mean that it is worth spending your money on this type of property. When you first think about buying a storage unit, you might have this vision in your head of a nice, spotlessly clean building that is full of empty lots. But, this is rarely the case.
Most of the time, storage units are not kept in good condition, and they are rarely empty when you purchase them. So, if you are thinking about buying storage units, you should be prepared for the challenge ahead.
A lot of the time, when you buy storage units, they are not profitable. This is because a lot of the time, the storage units that are up for sale are ones that have been abandoned. If you have ever seen Storage Wars, you will be familiar with the state that some storage units are left in, and it definitely isn’t pleasant.
In order to make money in storage units, you often have to buy these filthy units at a low price, do the work to clean them up and make them usable, and then sell them on at a high price. It is possible to make excellent money when investing in storage units, but as you can see, it isn’t always the most pleasant option.
Reasons to Invest in Storage Units
As long as you don’t mind getting your hands dirty, then investing in storage units is an outstanding option. But the fact that you can make good ROI when investing in storage units isn’t the only reason why you should do this. In fact, there are lots of reasons why you should consider this form of investment, so let’s take a look at what they are.
Well, one of the most appealing things about investing in storage units is that they are low maintenance. Yes, to begin with they are often a lot of hard work, and you will have to put the effort in. But, once you have returned the storage units to a clean and usable state, you can simply rent them out or sell them, and then the maintenance on them is no longer your responsibility. So, the only thing that you will have to maintain in the building is the office, and the corridors leading to the different units.
Aside, from this, the other major attraction for investing in storage units is the fact that you don’t really need to hire many staff members for the unit. Once the units are rented out, you do not have to do anything with them. So, the only members of staff that you need are ones to run the office, and security guards to manage the units at night. This means that your outgoing payments will be very low, so you will be able to make even more profit.
Are storage units a waste of money?
When you first purchase storage units, you might immediately think that they are a waste of money. Especially when you see the items that have been left in the unit. But, you can often make a good amount of money by selling these items on, and then you will make even more money once you sell or rent out the units. So, no, they are not a waste of money.
How many storage units can you put on 1 acre?
As well as purchasing an existing set of storage units, you could decide to set up your own site. On 1 acre of land, you will be able to fit around 200 10 × 20 units. Of course, if you install larger units, then the number of buildings you will be able to fit will reduce.
Do storage units get broken into often?
Unfortunately, yes, storage units are frequently a target for break-ins. But, it is possible to increase the security of the units by adding extra locks and chains to the doors. Hiring a security guard to police the area during the nighttime will also improve the security of your storage units.