Some types of Mississippi commercial real estate investment opportunities tend to be more profitable than others. Similarly, some types of commercial real estate opportunities carry less risk than others. While no type of commercial real estate investment is without risk, one investment opportunity that typically carries a low risk is the self-storage industry.
Per REJournals, economists predict that the self-storage industry is going to continue to see growth in the years to come, with the industry poised to see an annual growth rate of 5.45% between 2021 and 2026.
What drives demand for self-storage
The main reason many people consider the self-storage industry to be low-risk is that demand for storage units remains high in strong as well as weak economies. When the economy is strong, people buy more items, driving up a need for places to put them. When the economy takes a dive, people may have to downsize from their home and office buildings, which also drives demand for self-storage space. In other words, it is a relatively recession-resistant industry and is low-risk as a result.
What to consider before investing in self-storage
While the self-storage industry, in general, carries minimal risk for investors, you still need to take care when deciding where to open a self-storage business, what types of units to have and how much to charge. The most profitable self-storage facilities are often in high-traffic areas. Depending on where you plan to build yours, you may also want to consider adding storage space for boats or RVs.
Between 2009 and 2018, self-storage facility investors saw an average annual return on their investments of 16.9%.