Self-storage has become a popular investment buzzword over the last few years, and according to experts, it’s for a good reason.
These investments are among the only ones that thrived during the pandemic, and because self-storage units are used by so many people, across a myriad demographics, they are more resistant to market changes than other investments.
Another point in their favor is that, unlike renting homes and apartments, there is little infrastructure to maintain, few staff members to pay, and preparing a self-storage unit for a new client often means little more than sweeping the floor and handing over the key or door code.
The Financial Appeal of Self-Storage
Investing in self-storage facilities has become even more attractive to many individuals with the growth of Balcomie Capital. Founded by Travis Baucom, the firm provides accredited investors and high-net-worth individuals with a means to invest in value-adding and ground-up self-storage construction projects.
“People focus too much on buying houses. Focusing on self-storage has presented more returns on the dollar, and commercial real estate has proven more profitable,” shared Baucom.
What accredited investors love about their self-storage investments is that they provide a low-stress, consistent stream of passive income. “The high profitability of self-storage units has made them a popular choice among investors seeking tax-advantaged investments that can generate long-term revenue,” explained Baucom further.
The founder has become a thought leader and go-to source of advice for those looking to get into self-storage investing. His tips on navigating these new and lucrative investment opportunities have made him a popular figure in the community.
Baucom launched his firm — focused on creating generational wealth and passive income streams — only last year, but previously held the CEO role for Texas’s biggest private distressed home buying company and has already proven excellent returns for his clients.
To date, Balcomie’s investment partners purchased more than 50 million in assets, while Baucom himself has purchased 400 homes and two apartment developments to create a remarkable average cash-for-cash return of 34 percent over the last 10 years. Below is some of his advice for those looking to get into the self-storage investment space.
Research the Market
The self-storage industry is growing, but it’s important to understand the market trends, supply and demand dynamics, and competition in the area in which you’re considering investing. Start following influencers like Baucom and his peers while conducting independent research about whether the niche is right for you.
Choose a Reputable Firm
Look for companies like Balcomie Capital with a proven track record and strong investment philosophy. Ensure they have a transparent investment process and a team with experience in the self-storage industry.
Balcomie builds its mission around personalized service, support, guidance, and on-staff experts to guide every decision. They can keep their service impeccable by limiting their services to a select group of accredited investors focused on alternative investments for high-net-worth individuals.
Consult a Financial Advisor
It’s always best to get an independent opinion from a trusted professional. Before becoming involved in a new investment project, a financial advisor can help you determine if the opportunity is right for you and provide resources to help you get started.
Determine Your Goals
A financial advisor will also help you to ensure that the self-storage investment in question aligns with your financial needs and goals. They can help you assess potential rewards as well as possible risks and offer insight on the subject.
Location is crucial when considering getting involved in a self-storage investment project since its location will affect its success.
Generally, look to invest in geographic areas with growing populations, high demand, and low competition. Within those areas, look for projects in high-traffic areas, such as just off a highway that most residents use to commute. It helps to put yourself in the tenant’s position, try asking yourself, ‘If I needed a unit, would I pick one in this location within this town?’
Invest in Quality Properties
This should go without saying, but, as an investor, you want the facility to be as well-built as possible so that it needs few repairs over the foreseeable future, thus saving you money. If it’s an existing facility, make sure it is well-maintained and offers a wide range of services to meet the needs of its customers.
Diversify Your Portfolio
For those looking to diversify their portfolio and add some lower-risk choices to their investments, self-storage facilities can be a great way to do so while reducing your overall investment risk. “It truly is a great diversification option for investors looking to mitigate risk in their portfolios,” said Baucom.
Learning this founder’s thoughts and advice, it’s clear that self-storage investment can be an excellent opportunity for accredited investors looking for alternative investment options with the potential for high returns.
About Travis Baucom
Travis Baucom, Founder of Balcomie Capital, is a seasoned asset investor with over 10 years of real estate investing experience, with an average above-market return yearly over the past decade. Balcomie Capital is a boutique firm for high-net-worth and high-income professionals. Its mission is to deliver fully-managed, private investments that allow investors to pursue what matters most to them, offering unprecedented access to income-producing private investments to help build a legacy and future for the next generation. To invest with Balcomie Capital, please visit: https://balcomiecapital.com