Many investors in today’s self-storage market are wondering what commercial assets are viable investment opportunities given the ongoing risks of the COVID-19 situation.
However, despite these challenges, the self-storage industry has seen ever-increasing demand and is showing itself to be resistant to market volatility.
According to a Global Industry Analysts report published in September 2020, despite the COVID-19 crisis, the global market for self-storage and moving services is estimated to be currently worth $80.8 billion. Also, potential returns for self-storage investors on individual assets are expected to grow at a rate of 6.6% year-over-year over the next 7 years.
With such significant growth projected within the self-storage industry, there’s never been a better time to invest.
Interested? If so, here are 5 self-storage industry trends to look out for in 2021 that may impact your future decision-making:
Online channels will continue to grow
Gone are the days of consumers physically driving past storage facilities to inspect them as potential options. Nowadays, would-be renters are increasingly searching for storage options digitally.
Virtual tours, online booking and payment, self-service kiosks, and automated access are all examples of emerging trends in response to COVID-19 social distancing rules.
As the competitive advantage of physical location decreases, these online channels provide new opportunities for emerging storage innovators and hosts to take the industry in a new direction.
Downsizing Means Increases In Demand
Unemployment levels in the US have been rising during the COVID-19 crisis. As a result, residential landlords are bracing themselves for the impact from jobless tenants now unable to pay rent.
If this pattern continues, we may see renters start to reassess their living situation. They may move back home with their family or explore other house sharing options. This is bad news for landlords, but good news for the self-storage industry. As downsizing increases, there will be an increasing need to store items that will no longer fit into smaller homes.
The same goes for businesses downsizing too. Many anticipate that it will not be ‘business as usual’ until the end of 2021. Moreover, some analysts even predict that it may never return to normal. This “new normal” will force many businesses towards downsizing to reduce costs, or moving to a remote work model. This could translate into vacant retail, office suites, and businesses looking for temporary storage for their equipment while they determine their next move.
If you’re looking to start your own self-storage side hustle, become a host with Stache.
Personal car ownership on the decline
In 2021, personal car ownership is expected to decline. This is due to more people opting to reduce their personal debt by forgoing the need for a car.
In turn, this will free up car storage spaces - such as garages - and people are expected to use that space to store their own items or rent out their empty garage space online.
If you’re holding onto your classic car in 2021, check out our guide to classic car storage.
One of the main reasons people choose to store their items in a storage facility is that it’s secure. Their items are locked safely away behind a door and padlock and are only accessible by those with the access code and/or a key.
However, a self-storage industry trend set to emerge in 2021 is the use of biometrics to increase security.
Biometric security creates an almost foolproof system that’s nearly impossible to breach. It uses the unique characteristics of each renter such as fingerprints, retina scans, and even voice and facial-recognition. This results in undeniable identification and the peace of mind knowing that your stored items will remain safe and secure.
Read more about storage facility security here.
The two major threats to storage units are theft and temperature damage. Remote monitoring addresses these concerns right away, allowing storage renters and hosts to monitor their storage space and intervene if there are any issues.
Another type of storage unit that can be accessed remotely are climate-controlled storage units. And while they’re more expensive than their counterparts, they’re well worth the investment if renters plan to store any of the following items:
- Fabrics (including bedding) or clothing
- Antiques- especially wood furniture, brass, silverware
- Musical instruments
- Important paperwork and documents
- Books or magazines
- Valuables and collectibles
In addition, with remote monitoring, renters can track the internal temperature of their unit and receive an alert if something goes wrong. This gives them more of a chance of preventing damage to items that require climate-controlled storage.
Self-storage has proven itself to be a solid investment that can weather COVID-19 not only for 2021 but beyond that too. On top of that, as many businesses and people will undoubtedly struggle during 2021, self-storage companies offer an alternative way to make money during what may be a difficult time for some.