The self-storage sector has seen significant growth over the last few decades and showing absolutely no signs of slowing down. Today, there are (on average) 50,000 self storage facilities in the US and as of 2022, there were 2,050 self storage facilities in the UK, seeing a 2.65% increase compared to 2021.
Furthermore, according to the Self Storage Annual Report 2023, the occupancy rate for self storage residential units in the UK currently sits at 83.3%, with 51% of the public having generally good awareness around the benefits of self-storage units.
Why self-storage units are a great form of real estate investment
One of the many reasons self-storage units have become popular as a real estate investment is the fact that they provide a steady cash flow.
Unlike other kinds of real estate investments, such as traditional commercial and residential complexes or properties, self-storage facilities have lower operating costs in nearly all cases and also demand less maintenance. This means a steady income stream for investors, even during high levels of inflation or an economic slump.
Furthermore, self-storage facilities have very high occupancy rates today compared to traditional apartment complexes or mid-sized family homes, further contributing to their investment feasibility and financial stability.
However, one major factor that makes self-storage units a particularly attractive proposition for investors is their incredible resilience during shaky economic conditions. Whenever the economy goes into a slump, people are either forced to downsize their homes or relocate their workplace which, naturally, makes a self-storage residential unit a highly viable option. So, where other traditional forms of real estate investments struggle, self-storage facilities continue to maintain impressively high occupancy rates.
Add to that the fact that the self-storage market remains relatively ‘recession-resistant’ because people always need a reliable, practical, and cost-effective solution for storing their belongings, no matter what the state of the economy may be.
Self-storage units are also highly scalable investments, making them a very lucrative option for investors of all levels. For instance, you could start with a single facility and then steadily expand your portfolio by adding more units and renting them out or selling them at a profit.
This certainly provides for a more gradual and manageable learning curve, providing you a chance to really capitalise on the economies of scale. Also, self storage units can be built a lot quicker and more inexpensively than other kinds of properties, making it a breeze for investors to quickly grow their portfolio and enjoy a steady cash flow.
Technology has actually played a rather important role in how successful and attractive self storage units have become as a real estate investment. For instance, better climate control and security systems, along with improved online management tools have made it so much more convenient for facility managers to manage properties and provide a more quality-driven service to their end users. This has massively helped to drive the demand for self-storage facilities even further, thus, increasing their potential as a sound and profitable investment.
Closing thoughts
Investments in self-storage units is a trend that’s quickly gaining steam, offering a very lucrative and promising opportunity to those who want to further build and diversify their portfolio. Having the ability to scale, being recession-resistant, and offering consistent cash flow – self-storage facilities today are considered a highly favourable investment opportunity, more so than traditional forms of real estate investment.
As demand for self-storage units continues to rise, the profitability self-storage units offer is just plain hard to ignore, making them an excellent option whether you are a novice or experienced investor.
Woodpecker Self-Storage is a leading self-storage facility in Southampton, offering storage units of many different sizes from 20sqft to 160sqft which are accessible, secure, sustainable, and absolutely stress-free in every way imaginable. Contact us at hello@woodpeckerselfstorage.co.uk or call 0808 281 3333