Have you noticed how many self-storage buildings there are in your immediate area? Why is self-storage so popular all of a sudden?
The simple truth is that people love stuff. As homeownership becomes more challenging, people hold onto their things while renting.
We are entering a recession, which brings up a great question. Can you afford to store your items at $200 to $300 a month?
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Two sides to a coin. You can either pay interest or earn interest. It’s the same with rent towards self-storage. You can either pay someone to store your stuff or have someone pay you.
I earn $125/month in rental income by letting people store stuff on my land. It is an excellent return for doing nothing. Let’s take a look at both sides of the self-storage coin.
Paying self-storage rents. I read the book “Growing Wealth in Self-Storage” almost two years ago. This book gives us an insider view of how self-storage companies make money.
Here is a hint: they will raise your rent every year. When using a self-storage module, you will never get ahead of the power curve.
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They will also entice you with air-conditioned areas, boat and RV storage, and bigger spaces. Once they have their hooks in you, getting away will be tough.
Do you really need this stuff? The bigger question is if you need the things you are keeping. As a landlord, I see the items my tenants keep in storage.
Trust me; I have never been impressed by what my tenants hold in storage. Most of it is memory-based items that “seem” to hold sentimental value.
It is almost as if they feel that they must hold these items. It is time to get away from these feelings because they keep you broke.
Tough love. It sounds harsh to get rid of all your memories, but that’s not the intent. It is better to find other ways to remember the past.
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Can you take pictures of these items? Can you consolidate them down to a smaller size? Do you need every single one of these items, or can you get rid of 50-80% of them?
These questions will help you move forward and reduce the number of things you keep. Not only are these things preventing you from building wealth, but they also hold you back emotionally.
A guide to moving forward. An excellent book to read is “The Life-Changing Magic of Tidying Up.” The book helps you pay respect and show grace to all of your belongings.
It tells us that a lightweight lifestyle gives us more clarity, insight, and energy. Living in the past doesn’t achieve much for us. With today’s technology, we can document our history and keep it in the cloud.
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Writing for the win. As an aside, think about writing. Writing is the perfect way to hold on to memories while moving forward. I wrote a seven-part series on my recent seven-day road trip.
If I feel sentimental, I can look at the pictures and read my articles. It’s better than keeping a trunk full of souvenirs.
Cleaning and renting. Now that you are getting rid of your storage unit, you may even feel the urge to clean up your home.
Many of us keep rooms full of old junk and memories. How about your garage or shed? How do you use these spaces?
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If you can clean these up, you can rent them to someone else. Today, we live in the sharing economy, and it’s a great time to get on board.
You can go from renting a storage space and wasting $200-$300/month to renting your garage, parking space, room, or shed for $200-$800/month.
A recession is coming. People, I need to be very clear. The federal government needs to stop inflation at all costs. The US dollar is the world’s reserve currency, and we must keep it that way.
This need to keep the US dollar stable means we will go into recession to stop runaway inflation. What does going into recession mean to you?
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A recession will reset all the progress we made in the workforce. All of the pay raises and worker entitlement will go away quickly.
Companies must cut their workforces to keep costs low and shareholders happy. We, the shareholders, want our dividends—no matter the cost to employees. Sorry, but this is the world in which we live.
Passive income vs. a recession. Even if you keep your job, things will get tight. Remember, inflation is still over 8%, and people will start losing their jobs.
It may be tough to find additional work outside of delivering pizzas. Those that embrace passive income and the sharing economy will have the extra cash flow to survive and thrive.
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But creating passive income has a learning curve. You cannot just put up your garage for rent and get top dollar. You need to understand what keywords, extras, and amenities customers are looking to purchase.
The moral of the story is you need to start now. Don’t wait until you get into financial trouble to build your income streams. You want a mature income stream to earn top dollar for your rental spaces.
A quick story. My wife and I have rented rooms for almost four years. It is a mature income stream for us. We won’t have to lower our prices during the recession because we know how to “add more value” to keep prices high.
My blog also has two years’ worth of articles and books about inflation, recessions, passive income, and retirement. I have books on these topics as well. People are going to start researching these topics as job losses mount.
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You must get ahead of the power curve. Always think a few months and years ahead to see where the economy is heading and how you can tap into the future.
Conclusion. If we plunge into a recession, how do you think self-storage operators will keep making money? Yes, they are going to raise rates.
They know that you will be in a tight spot. Many people will stop paying their self-storage premiums, but self-storage operators must eat.
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They will raise rates on the paying customers to supplement their falling income elsewhere—this is the way of the world.
You can either whine (or cry) about it or become the one who is rising rates. These topics are tough to discuss, but it is the truth.
You are either the person who has to pay higher prices or receives higher rents. Which situation sounds better to you? Good Luck!
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