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Why the self-storage business is resilient to crisis

The self-storage industry remains recession-resistant, despite the residual effect of coronavirus. The resilient nature of this industry greatly benefits operators, investors, and the economy as a whole. Self Storage has a recession resistance that is uncommon among other industries, making it a worthwhile investment when traders want to be defensive. Despite the 2008-2010 recession, Self Storage managed to avoid some of the financial fallout. The National Association of Real Estate Investment Trusts’ “All Equity Index”s shows that the industry overall lost 40% of its value during 2008-2010, but companies in self-storage had an overall return of around 5%; including dividends. Here are two reasons self-storage is so crisis or pandemic resilient
  1. There is an increased demand for storage
A recession often creates a desire for smaller homes, but people still need places to store their stuff. Self-storage facilities may see increased rates during hard economic times, which makes them a good investment compared to other real estate investments during a pandemic or crisis
  1. Low maintenance/operation cost
Unlike residential and commercial real estate, self-storage facilities have significantly reduced operating and maintenance costs. For example, multifamily buildings require leasing staff, property managers, onsite maintenance, and a myriad of other regular transactions. Higher profit margins make self-storage profitable in recessions when lending standards are tighter and easier sources of capital are scarce. Investing during hard financial times is a difficult endeavor. Countercyclical investments are one option to ease the worry and allow you to navigate tough economic conditions more easily. Understanding what makes self-storage facilities a recession-resistant investment can help you find more stability in your retirement assets, which can make financial times more manageable.
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