The State of Self-Storage Investing in Texas in 2019 - CXRE Commercial

If you rent or have ever rented a self-storage unit, you have Texans Russ Williams and his stepson Bob Munn to thank for it. In 1964, the pair constructed built the first modern self-storage facility in Odessa, Texas. That’s not to say that there weren’t storage facilities before 1964. However, Willians and Munn added a twist – garage-style doors. So you could call the Lone Star State is the home of modern self-storage.

Since Williams and Munn constructed their first facility over 50 years ago, the self-storage industry has grown immensely. Currently, the United States has 2.3B SF total of rentable self-storage space spread throughout 50,000 storage facilities. What’s more, this sector is a multi-billion dollar industry that produces $38B annually. Also, self-storage investing is thought of by many to be a solid commercial real estate purchase.

 

Self-Storage Investing

Self Storage Investing in TexasAs you can probably guess, self-storage facilities are considered by many to be sure-fire investments for your commercial real estate portfolio.

When compared to some other real estate investments (like office buildings or retail properties), self-storage properties require much less attention and upkeep. On top of that, approximately 10% of American households rent a self-storage unit. And each month, they spend about $90 per month on rent.

In general, if you choose a good property, self-storage facilities can be money-making properties. At the same time, real estate investors need to be warned – self-storage facilities can also be money pits. If you’re thinking of purchasing a self-storage development in Houston, in this post we review self-storage investing, cover some self-storage market trends, and talk about Houston self-storage commercial real estate investment opportunities.

Self-Storage Market Trends

If you’re considering investing in self-storage, then here are some self-storage market trends that you should be aware of:

  • Growth – Industry insider predict that the self-storage industry will continue to grow over the next few years. By 2024, the $38B industry should grow to $49.24B, a 134.79% growth rate. With the type of project growth rate, now could be an excellent time to invest.
  • Increasing Modernization – Unlike the simple garage-door units that most people think of, 21st-century self-storage embraces all sorts of technologies. For example, mobile reservation systems and increased automation allow renters to quickly and easily rent units, moving supplies, and moving trucks. Furthermore, these days renters expect certain features like climate-controlled units, camera surveillance, and keypad entry.
  • Visual Appeal – Also, unlike the cinder-block buildings of the past, many new facilities have updated aesthetics (like granite countertops in reception areas) for a great visual appeal. These ‘3rd-generation’ facilities seek to improve renters’ experience and make people feel at home.
  • Building Conversions – Instead of constructing brand new buildings, some self-storage investors are choosing to repurpose older, unused structures for self-storage. Specifically, this is something to consider when investing, especially in an urban area.

By 2024, the $38B industry should grow to $49.24B, a 134.79% growth rate

Self Storage Investing in Texas

Houston Self-Storage Commercial Real Estate Investment Opportunities

Without a doubt, there are plenty of opportunities to invest in self-storage in Houston. For example, the greater Houston metro area has over 6 million residents. Many of these residents already have or may soon need self-storage. On top of that, Houston is a big city for business. And businesses are one of the biggest self-storage customers. In addition, Houston will continue to add both new residents and new businesses in the next decade. This translates into greater demand for self-storage.

There are about 50,000 self-storage facilities across the nation. In contrast, there are only about 12,000 Starbucks coffee shops and around over 14,000 McDonald’s restaurants in the United States.

To help you find the best Houston self-storage commercial real estate investment opportunities, here are a few things to keep in mind:

  • Local Demographics – No matter where you invest, the location must have enough people with enough disposable income to afford self-storage. Specifically, the area needs adequate population density, traffic count, and a high enough median household income.
  • The Facility’s Condition – If purchasing a used property, you may need to do upgrades. Some simple projects could be repairing broken doors. However, if the facility doesn’t have up-to-date technologies and systems, you may face a significant investment to modernize it.
  • Your Competition – Before purchasing a Houston self-storage facility, scope out the local competition. Find out who your competition is, how facilities are in the area, and how many units these facilities have.

Investing in Houston Self-Storage

As the home of modern self-storage, the Lone Star State has many opportunities for commercial real estate investors. If you have considered buying a self-storage facility in Houston, look for a property in a good location that offers long-term profitability. To learn more about investing in Houston self-storage, contact CXRE today. We know the Houston submarkets and can help you make a solid investment.

Share This

CXRE » Commercial Real Estate Investment » The State of Self-Storage Investing in Texas in 2019