June 2023 - Invest In Self Storage

Investing in Real Estate: Choosing Between A Self-Storage Fund and Multifamily Syndication

July 16, 2024June 26, 2023 by devteam

Investing in real estate can be a lucrative way to diversify your investment portfolio and generate passive income. Two popular options for passive investors are self-storage funds and multifamily syndications. While both have the potential to yield significant returns, there are distinct differences between the two investment strategies. In this blog, we will explore the pros and cons of investing in a self-storage fund versus investing in multifamily syndication to help you decide which investment option is right for you. Self-Storage Funds: Self-storage funds involve investing in a portfolio of self-storage properties. These funds are managed by professional asset managers who identify and acquire self-storage facilities, manage them, and then sell them for a profit. As an investor, you are not directly involved in the day-to-day operations of the facilities. Advantages of self-storage funds: Diversification: Self-storage funds offer diversification as they invest in multiple properties across different locations. Low maintenance costs: Self-storage facilities require minimal maintenance, which means lower operating costs for the fund. Steady income: Self-storage facilities generate a steady income through rental payments, making it a stable investment option. Low risk: Investing in a self-storage fund carries a relatively low risk compared to multifamily syndication as it involves investing in multiple facilities Disadvantages of self-storage funds: Limited control: The fund managers are responsible for making all major decisions regarding the properties, including buying and selling decisions, property management, and marketing strategies. Regulatory Risks: Self-storage facilities are subject to various regulations and zoning laws. These regulations can vary from state to state and impact the self-storage fund’s profitability. Therefore, it’s always advisable to review the location before investing. Multifamily Syndication: Multifamily syndication involves pooling funds from multiple investors to acquire and manage multifamily properties such as apartments or townhouses. The properties are operated by a professional asset manager responsible for ensuring the smooth running of the properties and generating returns for investors. Advantages of Multifamily Syndication: High growth potential: Multifamily syndication offers high growth potential, involving investing in multiple properties across different locations. Control: As an investor, you have a say in the management of the properties. Tax benefits: Multifamily syndication offers tax benefits such as depreciation, which can reduce tax liability. Disadvantages of Multifamily Syndication: High operating costs: Multifamily properties require high maintenance costs, which can affect returns on investment. Risk: Investing in multifamily syndication carries a higher risk as it involves investing in multiple properties, which can be affected by market fluctuations. Conclusion: Both self-storage funds and multifamily syndication are viable investment options for passive investors. While self-storage funds offer diversification, low maintenance costs, and steady income, multifamily syndication provides high growth potential, control, and tax benefits. Ultimately, your investment choice will depend on your personal investment goals, risk appetite, and financial situation. Find Your Perfect Fit: Multifamily or Self Storage? You Can Make a Decision, to schedule one to one strategy session with us.

Self-Storage Investing vs. Stock Market

July 16, 2024June 26, 2023 by devteam

Investing is one of the most important decisions we can make in our lives. Whether it’s for our retirement, a rainy day fund or to build our wealth, the choices we make can have a significant impact on our financial future. But with so many investment options available, it can be overwhelming to choose the right one. In this blog, we’ll explore the differences between passively investing in self-storage versus stocks, and help you make an informed decision about which option is best for your investment goals. Passive Self-Storage Investing Passive self-storage investing involves investing in self-storage facilities through a fund or syndication, without actively managing the property. Here are some pros and cons of passive self-storage investing: Pros Diversification: Investing in a self-storage through a fund or syndication, allows you to diversify your investment portfolio. Rather than putting all your money into one property, you can invest in multiple properties across different regions or countries. Steady income: Self-storage facilities generate a steady income stream, making them an attractive investment for those seeking regular cash flow. Unlike other real estate types, self-storage is less volatile and less dependent on market cycles, making it a more stable investment. Low maintenance: One of the significant advantages of passive self-storage investing is that it requires no active management. The REIT or fund will handle all the property management tasks, including leasing, maintenance, and repairs. High demand: The demand for self-storage facilities has grown consistently in recent years. With people downsizing their homes and more businesses using self-storage for inventory and equipment, the need for self-storage facilities will continue growing. Cons Limited control: With passive self-storage investing, you have little control over the property’s management. You rely on a sponsor or fund manager to make all the decisions, including when to buy and sell properties. Limited liquidity: Self-storage fund investments can be illiquid, making it difficult to sell your investment if you need to raise capital quickly. The average holding period for passive self-storage investments ranges between 3-5 years based on the operator you are dealing with. Stocks Stocks are a popular investment option that involves buying shares in publicly-traded companies. Here are some pros and cons of investing in stocks: Here are some pros and cons of Stocks : Pros Potential high returns: Stocks have a higher potential for returns than most other investment options. If you invest in the right company, you could see significant returns on your investment. Liquidity: Stocks are highly liquid, meaning you can buy and sell shares quickly and easily. This makes it easier to adjust your investment portfolio as needed. Control: Investing in stocks gives you control over your investment. You can choose which companies to invest in, how many shares to buy, and when to sell. Cons Market volatility: The stock market is highly volatile, with prices fluctuating daily based on market conditions. This volatility can make it challenging to predict how your investment will perform. Lack of diversification: Investing in individual stocks can be risky if you do not diversify your portfolio. If you put all your money into one company, and that company fails, you could lose your investment. Fees: Investing in stocks comes with costs, including brokerage fees, commissions, and taxes. These fees can eat into your returns, reducing your overall profit. Emotional investing: Investing in stocks can be emotional, with investors often making decisions based on fear or greed. This can lead to poor investment decisions that could negatively impact your returns. Conclusion Both passive self-storage investing and stocks have their strengths and weaknesses. Passive self-storage investing offers diversification, steady income, and low maintenance, while stocks offer high potential returns, liquidity, and control. However, passive self-storage investing comes with limited power, fees, and market risks, while stocks come with market volatility, lack of diversification, costs, and emotional investing. Ultimately, your investment option will depend on your investment goals, risk tolerance, and personal preferences. Want to learn more about self-storage investment funds and how they could benefit your portfolio? Schedule an investor introductory session.

How to Evaluate Self-Storage Investment Opportunities

July 16, 2024June 12, 2023 by devteam

Self-storage investments can be an excellent opportunity for passive investors to diversify their portfolios. However, evaluating the right investment opportunity can be daunting, especially for those needing industry experience. This blog post will guide evaluating self-storage investment opportunities for better investment outcomes. Considerations for Evaluating Self-Storage Investments Market Demand and Competition By understanding market demand and competition, passive investors can make informed decisions about their self-storage investments. This can help ensure long-term profitability and success in the industry Property Location/Accessibility The location of the storage units is a crucial factor to consider. The storage unit must be easily accessible to the customers. For example, is the self-storage storage unit located near a major roadway or highway or in a prominent or easily accessible location? It’s also essential to consider the surrounding amenities in the area to determine if customers will be willing to rent a unit at the site. A good self-storage investment opportunity must have adequate access and visibility to attract and retain customers. Property Management The management of the property is another essential consideration. The property manager should have experience managing properties of similar sizes and be equipped to handle the unique challenges of self-storage properties. A good property manager should be responsive, responsible, and able to promptly take care of repairs and maintenance. Furthermore, a property manager should be able to manage and retain customers by ensuring that the property stays clean, safe, and secure. Occupancy Rates Occupancy rates help investors determine the profitability of self-storage investments. A high occupancy rate indicates high demand for storage units, and the property will likely generate a steady cash flow. Key metrics include rents, vacancy rates, customer demographics, and rent bumps. Bumps refer to the rent a tenant will pay when renewing their lease. A decent self-storage investment should have occupancy rates of over 80% with well-structured lease agreements. Capitalization Rates Capitalization rates (Cap rates) indicate an investment property’s expected annual return ratio. It measures the property’s current value against the expected net operating income. The possible return on investment increases with the cap rate. When evaluating self-storage investments, it’s crucial to understand the prevailing cap rates in the market and the potential for asset appreciation over time. The appropriate Cap rate is 6.5-9% for self-storage assets. Historical Returns and Reviews Lastly, always check the historical financials of the self-storage properties. It’s essential to evaluate the track record of the property in terms of rental income, returns on investment, and customer satisfaction. In addition, reviews can be used to determine the property’s reputation within the community. Bottom-Line Evaluating self-storage investment opportunities requires careful consideration of several factors. Investing in a great self-storage property can provide excellent returns and stable income streams, making it an ideal investment choice for passive investors. As you consider the investment options for self-storage ventures, ensure that you have the appropriate financial support and a professional team to manage the property. Maximizing your returns with self-storage investment opportunities starts with a self-storage fund. schedule a free call with us.

How you can invest in self-storage with your IRA or 401(k)

June 8, 2023June 6, 2023 by devteam

Investing in self-storage with your IRA or 401(k) can be a great investment option, especially if you’re a passive investor looking for a reliable investment option. In addition, self-storage facilities offer a unique investment opportunity that is historically less volatile than traditional stocks and bonds, making it a quality investment for those who want to build a long-term financial portfolio. Why Self-Storage is a Good Investment Opportunity? Self-storage is a growing industry, with the demand for storage space increasing yearly. People need extra storage space for various reasons, including downsizing, moving, and decluttering. This demand is not likely to go down anytime soon, making self-storage a reliable investment option for passive investors. Unlike other real estate investments, self-storage facility investments have lower operating costs and maintenance expenses, making them easier to manage. Moreover, self-storage facilities do not require tenants to sign long-term leases, and there is less tenant turnover than in other rental properties. Why Invest in Self-Storage with Your IRA or 401(k)? Investing in self-storage with your IRA or 401(k) has several advantages for passive investors. Tax advantages: Investing in self-storage with your IRA or 401(k) can provide tax advantages. Any income generated from the investment will be tax-deferred or tax-free, depending on your account type. Diversification: Self-storage can provide diversification in your investment portfolio. It is a real estate investment with different risk factors than other real estate investments, such as residential or commercial properties. This can help you mitigate risk and has the potential to improve your overall returns. Consistent returns: Self-storage facilities can provide consistent returns. The demand for storage space is steady, and people are willing to pay a monthly fee. This can provide a reliable source of income for investors. Long-term appreciation: Self-storage facilities can appreciate over time. As the demand for storage space increases, the facility’s value can also increase. This can provide a long-term appreciation for investors. Read More – Understanding The Major Market Trends in Self-Storage Investing How you can invest in self-storage with your IRA or 401(k): Investing in self-storage with your IRA or 401(k) is a great way to diversify your retirement portfolio and earn passive income. Here are some steps to consider: Open a self-directed IRA or Solo 401(k): To invest in alternative assets like self-storage, you’ll need a self-directed IRA or Solo 401(k). These accounts allow you to invest in a broader range of investments than traditional retirement accounts, such as stocks and bonds. Fund your account: Once you have your self-directed IRA or Solo 401(k) set up, you’ll need to fund it. You can do this by rolling over funds from an existing retirement account, making contributions, or combining both. Find a self-storage investment: Next, you’ll need to find a self-storage investment that meets your criteria. This may involve researching different self-storage facilities and assessing their financials and management. Conduct due diligence: Before making any investment, conduct thorough due diligence. This may involve reviewing financial statements, analyzing the facility’s occupancy rates, and assessing the competition in the area. Invest: You can directly invest in Storage Units Equity Income Fund for more benefits. Monitor your investment: As with any investment, monitoring your self-storage investment is essential. Keep track of occupancy rates, rental income, and expenses to ensure your investment performs as expected. Conclusion Investing in self-storage with your IRA or 401(k) is an intelligent way to build wealth for your future. Self-storage facilities offer a unique investment opportunity less volatile than traditional stocks and bonds, making it an ideal investment for passive investors. By establishing a self-directed IRA or 401(k) account and investing in self-storage, you can diversify your retirement portfolio, earn higher returns, and enjoy tax-deferred or tax-free growth. Are you looking to invest in a self-storage fund with your retirement account? schedule a free strategy call with our director of investor relations.