The Covid-19 pandemic has not been kind to urban self-storage investing. In fact, it’s a downright disaster. Here’s what the New York Times had to say: What once seemed like one of the few recession-proof parts of commercial real estate looks as vulnerable as many other businesses. And then backs that up with the facts: Monthly rent for new customers before one-time discounts for a 10-by-10 unit without air-conditioning and heat, for example, declined 4.3 percent nationwide on an annualized basis, according to the research site Yardi Matrix. For the same unit with climate control, rent fell 6.7 percent. You can read the entire article here.. So what happened and are their any bright spots?

There are two types of self-storage investors: 1) those that got into the industry early and rest on those laurels and 2) those that are making it happen in 2020. However, the storage industry loves to only embrace the narratives of the first group, and rarely talks about those entering the industry today and the issues that are important to them. And to succeed today you pretty much have to shun the first group and rely more on those who are real-time buying and operating under the new realities the industry faces. In this episode we’re going to talk about why there are two entirely different views of the industry, why one is more important than the other, and a call to action on the megatrends and issues of those who are trying to make money investing in storage facilities today.

A common question for most investors is whether it’s more profitable to build a self-storage facility from scratch or to buy an existing one. There are many issues to consider on this topic, but here is a basic explanation of the good and bad aspects to both.

There’s no better form of financing for a self-storage facility than “seller carry” – the concept of the seller creating their own mortgage to finance the purchase. But how do you get it? And what should you watch out for?

Some self-storage facility owners – particularly those that deal in raising capital in syndications – are trying to proclaim that the Covid-19 pandemic has created a “strong buying opportunity” in storage properties. However, this is simply not the case. Instead, Covid-19 has brought a valuable lesson learned to the storage industry as well as a prediction for the future.