How to increase your net worth with self storage investmentFebruary 01, 2017
Self storage investment is a great, risk free way to increase your net worth quickly. Any investor will tell you that the key to being a successful investor is to owe several low-risk, high value properties. This will stabilize your portfolio and allow you to make greater financial risk in the future. While demanding a reasonably high initial investment, these opportunities have huge earning potential and relatively low upkeep expenses. This means that, once your initial investment is recouped, then you can quickly generate a large and consistent profit margin. This means that you can quickly increase your net wealth, thereby allowing you to further invest in the property or other real estate opportunities.
A profit margin is the gross profit minus all controllable and non-controllable deductions. These can include labour costs, inventory, regular maintenance, interest payments, or taxes. What is left over after all the deductions is the net profit. This is the amount that the owner would theoretically take home at the end of the day. Some businesses offer higher potential profit margins than other businesses. In order to be a successful real estate investor, you must retain as many of these money generating opportunities as possible. By securing stable sources of income, you can then reinvest in other riskier opportunities that may offer even greater profit possibilities. The bottom line is that the more profitable properties you own, then the higher your net worth.
Self storage investment can offer you a stable, first step in generating a higher net worth. By being a business that is typically more profitable, a self storage unit can be a great way to consistently generate income. This is possible because a self storage building has relatively low monthly maintenance costs. There is no inventory to tie up capital, there is a minimum commitment to labour costs, and depending on the location of the property, taxes associated with the property can be next to nothing. All the money, therefore, that is created by the actual service being rendered (in this case storing goods) is then translated directly into profit. Obviously, the higher the profit, the more money you make.
Once you have found several properties that have consistent monetary return, you can then branch out into other real estate opportunities. These opportunities may be riskier, may demand more initial investment, or may not have the consistency of your self storage investments, but they offer a greater earning potential. Since you have diversified your portfolio by self storage investing, you can more easily take these risks without losing the shirt off of your back.
Therefore, by being stable and consistent, self or mini storage facilities can help create a strong money making base from which you, as the investor, can draw upon for other real estate or commercial investments. These other commitments might be riskier or demand a greater initial investment, but they may have the potential to be tremendous earners. Thus, by relying on the risk free environment associated with mini storage ownership, you can greatly increase your personal net worth.