By helping Americans store their junk, real estate investors make a lot. These people will not attend your local REIA meetings or seminars. They usually meet on the green and on cruiseships. They quietly enjoy increasing their cash-flow. And they are steadily building their wealth through the unexplored investment market of self-storage. The common real estate investor isn’t allowed to join this elite group, check more helpful hints.
You may perceive reality differently from what you think. This is especially true in self storage. Investors are often discouraged from entering self-storage because of their false perceptions. Find out more about self storage and these myths.
Myth #1. There’s a self-storage unit around every corner. It is difficult to make a living in the crowded marketplace.
It’s true. Self storage is now multi-use. Self storage has become a multi-use industry that is worth billions of dollars over the past twenty years. It is all about the building and development. The United States has over 45,000 storage facilities. That’s 6 feet of storage space for every American citizen. Investors still have the opportunity to reap extraordinary returns, even in highly-populated areas. It’s important to purchase an existing facility for the highest price based on actual income. This will allow you to increase cash flow while still operating the business efficiently.
I bought the first Florida facility, which was located in an area with high density. All of the buildings in town had an occupancy rate in the 75% range. After 18 months, occupancy had reached 92%. This resulted in a cash flow growth of nearly $6,000 per month. My competitors were still operating in the 70-80% range. Do not listen to anyone telling you that you aren’t capable of making it in today’s market.
Myth #2. Myth #2. I can’t make money unless I buy or build new facilities.
Because they are metal and have doors, self storage buildings can be thought of as expensive. They are much more affordable than many commercial buildings. Building and developing self-storage facilities is not the only challenge. It is often tedious and can take many months, if certainly not years to complete. The final result is a facility which is empty and has significant debt service. It could take years for the facility to break even and it is difficult to reach success.
Smart investors invest in older facilities that are in poor condition and need to be repaired. These properties rarely make it to the radar of big companies and are readily available at great costs. These properties are often able provide positive cash flow. After the repairs have been made and the facility has been properly managed, the money can begin to flow.