When comparing Self Storage to other real estate investments such as
Apartments, Office Buildings, and Retail, how do they compare? Lets
explore some of the most important factors.
Development Costs
The
development cost of self storage is one-third to one-half that of
Apartments (multi-family), office buildings, or retail properties.
Operating Costs
Owning
Real Estate requires regular maintenance of the grounds, appliances,
plumbing, electrical fixtures, etc., which usually require a
maintenance staff. As the graph illustrates, self-storage operating
costs are less than half that of other real estate properties.
Break-Even Occupancy Rates
When
owning investment property, you simply must fill a certain amount of
space to keep from losing money. In self storage, this break-even point
is considerably lower than other real estate ventures due to its low
development costs.
Annual Rent Ranges
This
chart illustrates that the annual rent ranges for self storage fall
within the range of other real estate. However, considering the lower
development and operational costs we discussed above, self storage can
yield a better bottom line.
Failure Rate Comparison
Compared
to other real estate investments, self storage has the ability to
absorb economic fluctuations, maintaining value during both good and
bad economic times.
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