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Real estate asset classes like retail and multi-family used to be the crown jewels of investing. Now they are volatile and even declining in today’s economy.
The same market shifts that have made these asset classes fall out of economic favor have benefitted one asset class in particular, self-storage. In 2020, it has emerged as the most attractive pivot in commercial real estate.
The economics don’t support self-storage becoming irrelevant any time soon, meaning it still has a lot of opportunity, even for new investors.
How have the changes brought on by Covid-19 made self-storage even more compelling for investors? What are the downsides of self-storage and how do we avoid them?
In this episode, I’m joined by entrepreneur, self-storage investor and best-selling author, AJ Osborne. He shares powerful insights on self-storage, why investors love it, and how to lower your risk in self-storage investing.
Three Things You’ll Learn In This Episode
Why there’s a growing demand for self-storage As real estate prices rise, our ability to hold as much as we consume has shrunk both individually and commercially. With businesses and channels of distribution becoming more decentralized, holding onto retail and warehouse space becomes less necessary, making self-storage the best way to keep possessions and inventory.
The ease of self-storage investing next to other asset classes Apartment building investing is highly competitive and near-impossible to cash flow right now. Additionally there’s a lot of costs and details involved in multi-families. Storage is affordable to build and easy to maintain and manage. Storage units can offer us stability through diversification, each size of storage unit is a product which attracts a different customer.
How to lower the risk of self-storage investing Demand is the one thing that will kill you in self-storage investing. Because it’s become such an in-demand model, we can risk falling into the trap of an over-built and over crowded market. Before you consider getting into any market, validate and confirm both current and future demand.
AJ Osborne is an American entrepreneur, businessman, and investor who owns and manages his self storage portfolio of over $100 million of assets through his companies Bitterroot Holdings, Cedar Creek Wealth, and Clear Water Benefits. He’s the owner and host of the largest self storage podcast, Self Storage Income, and author of the bestseller, The Investors Guide to Growing Wealth in Self Storage: The Step-By-Step Playbook for Turning a Real Estate Asset Into a Thriving Self Storage Business.
As an operator and private owner with over 1.2 million square feet of self storage, he regularly keynotes at national conferences on operations related to investing in, buying, and managing self storage facilities. AJ specializes in acquiring and turning around underperforming facilities with a value-add strategy, and loves to show other entrepreneurs and investors how to focus on technology and self storage automation.