People always say that commercial real estate is only for the rich and experienced. But what they dont know is that in every industry, there are always sectors that allow for you to invest with little to no money down and with huge monthly profits!
Let me enlighten you self storage investment by presenting hard facts about the other sectors in commercial real estate.
Office buildings and other such buildings such as malls, and even retail stores (at 53%), have a very high bank loan failure rate at 63%. This is why if you want to invest in office buildings, theres a great chance that youre loan wont be approved. Plus, office buildings have high development and overhead costs. Imagine the electricity bill that youll receive with all the lights that are turned on, not to mention the elevator, even when the building is not filled with tenants! Added to this is the high labor cost: administration, cleaning maintenance and security. It will really take a lot of money for you to manage this type of investment, with a 63% chance that youll fail!
Now lets take a look at apartment buildings. It also has a high bank loan failure rate at 58%! The development and maintenance costs are equally high as you would always need to fix leaky roofs, toilets, and even deal with unruly tenants! Whats worse is that some tenants just up and leave in the middle of the night without paying several months worth of rent! If youre thinking about investing in apartment complexes, I implore you to think twice before diving in! The stress of dealing with the tenants might be much more than you can handle, not to mention the high maintenance and development costs! Plus, to break-even you would need 80-90% occupancy rate! The same goes for office buildings!
Having laid out some statistics on these sectors of commercial real estate, you can see how buying commercial investments is not that simple. There are a lot you need to research in order to minimize the risk youre taking.
Now lets go on to a more positive sector.
Self storage investmentyes as in the place where you put all the junk that you cant bear to throw awayis one sector that banks love! How so? Because it has the lowest bank failure rate at only 8%! This way, you can rely on banks to help you finance your very own self storage facility! Whats more, you only need 67% occupancy rate to break even! And there are very low development and operating costs! All you need is one site manager OR just an automated kiosk and youre open for business!
Plus there are a lot of profit centers you can put up like a sort of self storage convenient store where they can buy locks, boxes, and other stuff they would need, but forgot to bring! Added to this is the fact that you dont have to worry about tenants and rent loss! When they dont pay, you can simply auction off their stuff and even earn a bigger profit! And what about the demand? Well, self storage has a skyrocketing demand because even if the economy is good or bad, people need a place to store their stuff!
