Zack childress real estate-there are basic traits in purchasing a self-storage property. The population is the key factor in determining which asset to purchase. The investors have to allocate some money for paying the self-storage. It is one of the best investment property options which are often overlooked by real estate investors. Zack Childress explains the significance of self-storage properties.
There are some fixed costs assigned to this type of storage. You can find large units of self-storage in all major cities of the country. Occupancy rate becomes saturated at a point of time. There are few conditions like non-zoning areas, exorbitant prices assigned for each square foot in self-storage properties. These conditions stand as an obstacle and create unaffordable investment situations for buyers. The density of the population is the first factor to be checked.
The densely populated San Francisco has most of the self-storage properties and it is one of the best areas to invest. There are plenty of job opportunities and growth is predominant. In turn, every citizen will afford to buy a home. The self-storage properties rental income should be priced for 1 dollar which means that it is a positive trend. Distressed properties are of great value. There is a potential growth for these properties in future. Commercial real estate may drop in the forthcoming years so it advisable to rely on REO properties.
Asset Class Review
There are 3 types of asset classes namely self-storage, hotels and senior housing. Among the different types of asset class, self-storage is versatile and unique. These properties are associated with REIT and it has been known for its high performance. The properties differ in quality of construction and square feet. The versatility of these properties is highlighted because they can be made into a self-storage from a tear down warehouse, vacant homes or retail shops. Similarly the storey of these properties can be either single or multiple. They can be given for rental period for a month or for a short term like 6 months to a year. These properties are designed with enhanced security features like CCTV.
The extremely bad climatic conditions affect and cause damage to a property is a known fact. To prevent from humidity and mist conditions, the tenants have to pay an amount to protect their things. Storage properties come with many facilities like cars, beverages and boating. The value of the properties will increment if you include additional amenities like retail or for lease. Storage does well in densely populated areas, as well as markets that are experiencing population and job growth.
What to Look Out For When You Purchase a Deal?
- Location: Urban cities are having large number of self- storage properties which have an easy access to all essential centers like education, shopping, restaurant. Millennial population is high and they can consider buying these kinds of properties. Upgrade the kitchen and bathroom before selling the property. Buyers must inspect the property before signing the agreement.
- ROI is high when compared to other real estate investment properties.
Market rent and development cost is correlated.
Type – price (in dollars) /sq.ft
- Multifamily homes–60- 70
- Office purpose–50 -100
- Retail/commercial–50 to 80
- Self-storage–34 to 42
TYPES OF SELF-STORAGE PROPERTIES
- New development
- Owned by corporate
- Few years old
- Individual (privately owned)
- Business and commerce
- Distressed property
- Heavy rehab required
You can take the help of reliable property Management Company or realtor in case you are investing in self-storage property if you aren’t having any prior experience to avoid scam. To learn more about investment strategy and learn the tricks of successful investing, watch the webinars and podcasts of Zack Childress training programs in REI quick cash system.