Investing in self-storage can be extremely lucrative due to high demand across the country. Self-storage facilities can generate strong cash flow and ROI. Additionally, they are relatively easy to manage compared to other types of investment properties, as most self-storage facilities are fully automated and tenants usually stay for a few months at a time. Furthermore, self-storage is a recession-resistant investment, meaning that it will not be dramatically impacted by economic downturns or market fluctuations. This makes self storage a reliable asset class and an attractive option for investors who are looking to safeguard their investments over the long term. Additionally, self-storage has low operational costs, as you don't always need on-site staff and the costs of operating self-storage facilities are remarkably low. This leads to higher profits and fewer headaches for investors. For more information, please visit our net operating income calculator.

Investing in self-storage can be a lucrative venture, but there are some risks associated with it. The most common risks include:

• Market Risk: Self-storage is a highly micro-location-focused business, so it is important to research the local market conditions before investing. If the population and job growth are not steady, or if the location is not close to university campuses, residential areas, or businesses, then the investment may not be as profitable.
• Operational Risk: Self-storage facilities are relatively easy to manage, but there are still operational risks associated with them. These include the risk of theft, damage to the facility, and the risk of not being able to fill the units.
• Recession Risk: Self-storage is a recession-resistant investment, but there is still a risk that demand for storage space could decrease during a recession. This could lead to lower profits and a decrease in the value of the investment.

It is important to consider these risks before investing in self-storage and to make sure that you are comfortable with the potential risks and rewards associated with the investment.

When evaluating a self-storage investment, it's important to consider the surrounding market conditions, the level of competition within the market radius, and the saturation level of the market.

When considering the market conditions, it's important to look at the population and job growth, the ratio of homeowners to renters, and the proximity to university campuses, residential areas, and businesses. It's best to look at these metrics within a 3- to 5-mile radius of the facility.

When analyzing the competition in the area, it's important to consider the number of self-storage facilities nearby, any facilities under construction or in the planning stages, and the saturation level of the market. The saturation level of an area is measured by the gross square feet of storage space available per person. Currently, the average self-storage inventory per capita across the country is around 7 to 8 net square feet. A market with a per-capita inventory above the U.S. average is usually considered oversupplied, whereas anything below is undersupplied.

Self-storage investments typically involve purchasing a facility and renting out the individual units. This type of investment is considered to be one of the most recession-resistant sectors, and is highly affordable, even for first-time investors. Some of the most popular financing options available for self-storage properties include the SBA 7(a) and SBA 504 loan programs, which are typically secured through banks or credit unions. However, life company and CMBS loans are also available.

Investing in self-storage can have a number of tax implications, depending on the type of investment you make. For example, if you purchase a self-storage facility, you may be able to take advantage of depreciation deductions, which can reduce your taxable income. Additionally, you may be able to deduct certain expenses related to the operation of the facility, such as repairs and maintenance costs. You may also be able to deduct interest payments on any loans you take out to finance the purchase of the facility.

It's important to note that the tax implications of investing in self-storage can vary depending on your individual situation. It's best to consult with a tax professional to determine the best course of action for your particular situation.

When it comes to financing a self-storage investment, there are a number of options to consider. From conventional loans to SBA loans, there's no shortage of ways to get the funding you need. The most common type of loan used to finance a self-storage investment is a conventional loan from a bank, credit union, or other financial institution. These loans tend to have the lowest interest rates and the longest terms, making them a good option for investors who are looking for stability. Other financing options include SBA loans, which are government-backed loans that offer more flexible terms and lower interest rates than conventional loans. Additionally, investors can also consider private financing, such as hard money loans, bridge loans, and mezzanine financing.