Self-storage might not sound glamorous, but it’s the only asset class with an average occupancy of 92% and one that outperformed other asset classes in 2021, according to Fred Hubler. He notes it can offer passive income, inflation protection (since rates can adjust daily), and less tenant stress than other property types.
Once associated mainly with hoarders, self-storage is now used by 40% of Americans, driven in part by what Hubler calls the “4 D’s”: death, divorce, downsizing, and dislocation, with the latter three tending to rise during tough economic times like a recession. He notes that while smaller-home owners historically used self-storage more, the share of larger-home owners renting units is climbing too.
On the numbers, Hubler points to the 2023 Self-Storage Almanac: the typical rental is a 10×10 unit, and rents for these rose 13% in 2022. Looking at longer stretches, average returns on self-storage were 20.87% from 2001-2023 and 18.76% from 2006-2021, numbers strong enough that new self-storage construction, along with rehabs of older properties, is drawing real investor attention.
Storage units used to be a punchline – now they’re outperforming plenty of traditional asset classes.
See the full picture on Forbes, Self Storage Isn’t Just For Hoarders: A Primer For Investors.