• Home
  • News
  • Why the self-storage business is resilient to crisis

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.
Share on
Newsletter

Subscribe to our newsletter

Newsletter

Subscribe to nour newsletter