Self-Storage is HOT!
This means it’s a great time to get BURNED!
Huh?
Let me explain. I’m the author of BP’s newest real estate investing book, Storing Up Profits – Capitalize on America’s Obsession with STUFF by Investing in Self-Storage. And my most recent BP post reported on the crazy popularity of self-storage since the pandemic hit and why.
Investors of all types…residential, commercial, institutional, and newbies, are jumping in. Like I said…
It’s a great time to get burned.
Why?
Because buying popular assets at inflated prices can be a recipe for failure. When you buy near the top of the cycle, you may pay too much. And you may not be able to create the income and value improvements you hope for. Then you may find yourself underwater in the time of a correction.
Investing billionaire Howard Marks has a great book called Mastering the Market Cycle. I highly recommend it for every real estate investor. Marks explains why there will always be a cycle and why a downturn is always imminent. And he tells readers why buying a popular asset near the top is the most crucial time to pay a low price – not a high one. Which, of course, is precisely when the masses are paying a premium.
Is it even possible to get a good deal when prices are at unprecedented levels? Yes. I’ve written about this before in several posts. The key is finding assets with hidden intrinsic value.
I really don’t want you to get burned. So my goal in this post is to explain five dark sides of the self-storage business. These are potential downsides of the business you should look out for in your own thinking and in a potential investment.
My goal is that you aren’t blinded by the mad rush into storage and end up asking for your money back on my book. ? Or worse.
Risk #1: The top risk in self-storage: unexpected competition
Is your storage facility in a popular location? Is it in a major population center experiencing healthy growth? Is it located on a main road with…