How To invest in Self Storage Facilities
Investing in self-storage can be a profitable way to generate passive income and diversify your investment portfolio. Self-storage is a real estate investment that involves the purchase and management of self-storage facilities.
Here are a few ways to invest in self-storage:
Direct ownership: This is the most common way to invest in self-storage. It involves purchasing a self-storage facility and becoming the owner-operator. This method requires a significant investment of time and money, as the investor is responsible for the management and maintenance of the facility.
REITs: Real Estate Investment Trusts (REITs) allow investors to invest in self-storage facilities through the purchase of shares in a publicly traded REIT. This method is less risky than direct ownership, but it also generates lower returns.
Partnership: Some self-storage operators offer partnerships to investors. This method allows investors to invest in a specific self-storage facility, and share in the profits and losses. This method is less risky than direct ownership, but it also generates lower returns.
Publicly traded companies: Some self-storage companies are publicly traded, like Public Storage (PSA) or Extra Space Storage (EXR) and can be bought as shares on the stock market. This method allows investors to invest in the self-storage industry without the responsibilities of direct ownership or partnership.
When considering investing in self-storage, it's important to consider the location of the facility, the current and future demand for self-storage in the area, and the condition and occupancy rate of the facility. Additionally, it's important to understand the local regulations and zoning laws regarding self-storage facilities, as well as the costs associated with owning and operating a self-storage facility.
Overall, investing in self-storage can be a profitable way to generate passive income and diversify your investment portfolio, but it also requires a significant investment of time and money, and it's important to understand the local market and regulations before making an investment decision.