More and more companies, such as ZipCar are popping up to fill a need in this growing trend.  When you start a self storage business, it is tempting, of course, to look for additional sources of revenue.  Why not look for a Car Share Program?

• You have space
• Uh…. You would need the staff.  More on that here.

Why not?

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Looks like they are doing well dispite their housing downturn. According to the article revenue is up 7%!

Self Storge REIT Big Yellow Group Refinances

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Today….

SELF STORAGE IS RECESSION RESISTANT: Historically, the self storage industry does better during a recession than many other kinds of real estate. When the economy goes through a downturn, people will often downsize their housing, but they don’t want to part with their possessions. Self Storage becomes the answer for them. Recessions also often mean that a larger number of the population will move. People find themselves needing to relocate to find a new job, or to live in an area with a lower cost of living. This too, increases the demand for self storage facilities.

Of course, nothing is guaranteed. Some self storage businesses have seen a fall off in business during a recession. Why? Some families choose to tighten the belt and eliminate the “disposable” expense. However, when this occurs, it is often less pronounced then you see in many other sectors. In fact, The Motley Fool has identified a few stocks that “Took a Hike” – - and wouldn’t you know it? Two of the Four mentioned in the article are Self Storage Businesses!

This is Part II in the Why Invest in Self Storage series.

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A survey such as this is interesting, because it really isn’t about “hard data.” Rather, it is about how current owners feel about the future of their business. There is some value in that, I guess – but it is important to distinguish between how current owners “feel” about the future, and what is actually occuring.

Take the topic of rental rates, for example:

In the 3rd quarter results, 59.6% of owners felt that rates would go up. Another 23% felt that rates would remain the same. 17.3% felt that rates would go down. Interesting to know, but the report goes on to reveal:

“Comparing second quarter 2008 with the same quarter 2007, 51.4 percent of respondents indicate rental rates have increased, and a third indicate rates have stayed constant. Of the respondents, 12.3 percent report rate decreases from the same quarter last year. All these figures are slightly down from last quarter’s year-to-year figures.”

That information just packs more of a punch for me. I would rather know what is actually happening.

Get the entire report at:  http://www.selfstorageconfidenceindex.com/US_3Q.html

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According to a recent article in the San Antonio Business Journal, the Self Storage Industry is touting itself as a recession proof or recession resistant industry. Why? There are a number of factors:

• As people cut back or get foreclosed upon, they are moving into smaller homes. However, they are reluctant to get rid of all that stuff, so they will get a storage unit.
• Businesses that are downsizing or going out of business need a place to store the inventory they have been unable to unload. Self Storage provides an answer for them until they are able to find another answer.
• Recession can mean a time of transition for many families. Perhaps they need to relocate in order to find a new job. A move often includes the use of a Self Storage Facility.

The other side of the argument is that as disposible income shrinks, people will choose not to use a self storage unit. I certainly see merit in this. I’m sure that some people will choose to move out of a self storage unit as the money dries up. Even as the desposible income dries up, I find that people are very emotionally attached to all that stuff, and are unlikely to let it go.

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