Tips to Invest in Self-Storage from Bigger Garage Capital: Webinar Recap

This webinar was an enlightening session on investing in self-storage facilities. Our guests, Mike Margarella and Paul Beets from Bigger Garage Capital, covered the benefits, the mechanics, and the potential returns of this unique real estate investment. They also explained how storage units are recession-resistant, answered attendee questions, and more.

If you missed the live session but want to learn more, tune into the recorded webinar below or read the highlights we recap in this article. Knowledge is power—and self-storage facilities are just one more example of alternative investments for your self-directed IRA (SDIRA) and personal investing portfolio. Check it out now.

Key speakers

Host: Alex Perny, Host, Advanta IRA

Guest: Mike Margarella, Partner, Bigger Garage Capital

Guest: Paul Beets, Partner, Bigger Garage Capital

Webinar Agenda

      • Exploration of investing in self-storage facilities
      • Advantages and potential returns of investing in self-storage
      • Insights into the operation and management of self-storage facilities
      • Q&A session

3 Benefits of Investing in Self-Storage

1. Investing in storage facilities is a unique opportunity in the real estate sector with high potential returns. Mike Margarella and Paul Beets from Bigger Garage Capital highlighted the benefits of this alternative investment, which provides a chance for investors to diversify their portfolios and earn a stable income.

2. Self-storage units have low maintenance costs compared to other commercial properties. The units are generally just four walls and a roof. And self-storage investments are typically considered a recession-resistant and inflation-resistant segment of the real estate industry.

3. Storage facilities are less sensitive to economic volatility than the stock market. Bigger Garage Capital explained the reasons behind self-storage’s growing popularity as an investment: its recession-resistant nature, growing utilization, low maintenance costs, and accessible financing.

Margarella said, “During recessions, there’s generally a lot of upheaval, along with what’s called the four Ds: downsizing, displacement, death, and divorce. All Tenants in a storage facility illustrating the value of investing in self-storage.those things increase during a recession, which drives the demand for self-storage.”

And while this wasn’t covered in the webinar, we think these stats are compelling. After the housing bubble burst in 2008 and during the Great Recession, the majority of real estate investment trusts (REITs) took considerable hits. However, the self-storage sector enjoyed a positive 5% return, according to the National Association of Real Estate Investment Trusts (NAREIT), as reported by the United States Census Bureau. In the same publication, The Census Bureau also states that during the COVID-19 pandemic, the self-storage industry weathered the economic storm, with mini-warehouses and self-storage facilities enjoying “significant financial gains.”

Tips for Investing from Bigger Garage Capital

When you invest in self-storage, look for the potential for value creation. Bigger Garage Capital’s strategy is to target value-add assets that were mismanaged or priced below market rates.

      • They buy storage facilities for a deal, stabilize them, and turn them into positive cash-generating assets.
      • Eventually, they sell those properties for additional ROI.
      • Additionally, they look for revenue opportunities the previous storage unit owner-operator hadn’t captured.
      • And the company also finds hidden revenue opportunities, such as converting unused spaces into rentable commercial spaces.

In terms of capturing value in demand, Bigger Garage Capital is vertically integrated. They do all management and marketing in-house. This helps dramatically increase occupancy and rates, stabilizing their facilities.

How to Invest in Self-Storage

1. Acquire the asset. There are a few avenues you can explore to invest in storage facilities. Of course, you can personally acquire the property, which involves active participation in your investment. You must take care of rehabbing it, managing it, overseeing daily operations, dealing with tenants, etc. You can hire people to perform these duties for you—and you must do so if you invest with an SDIRA or solo 401(k). But you’re still responsible for overseeing the work, crunching the numbers, and maintaining a high level of involvement.

2. Participate in an investment fund. If you prefer a more passive way to invest in self-storage, investigate REITS and specific entities that pool funds to invest. Investment sponsors do all the heavy work and oversight. You sit back and reap the potential benefits when they roll in.

As we mentioned earlier, you can invest with a self-directed retirement account. This allows you to sock all investment income into your retirement plan, bypassing taxes (including capital gains). Self-direction is a powerful retirement planning strategy that helps you build tax-advantaged income with alternative investments, like storage units.

During the webinar, Margarella highlighted the potential self-storage facilities offer for self-directed investors, stating, “Paul and I both are strong believers in investing through SDIRAs, and we have worked with several folks who have done just that to invest in self-storage.”

Investing in self-storage facilities is an excellent way to add diversity to your retirement portfolio using an SDIRA or solo 401(k). And if you’d like to learn more, contact Advanta IRA today.

Additional resources on self-directed investing:

Commercial Real Estate Investing as an IRA Diversification Strategy

Invest in Real Estate in an IRA: A Beginner’s Guide

 

 

About Scott Maurer

Scott Maurer, Vice President of Sales for Advanta IRA, is a recognized expert in the field of self-directed IRAs. With a law degree from the University of Florida and as a designated Certified IRA Services Professional (CISP), Scott’s keen understanding of rules and regulations fuels his passion to educate others on the power of investing in alternative assets using self-directed IRAs. Scott is a frequent guest on retirement and investing webinars and podcasts, and he has shown thousands of individuals how to achieve financial freedom by teaching them how to use their retirement funds to invest in private placements, real estate, private lending, and more. Throughout his two decades in the industry, he has watched numerous unique investments unfold, giving him great perspective of what is possible when people take control of their retirement funds and investing decisions.