Let’s have a survey, what’s your current overall LTV for RE? How about your overall margin use for your stock accounts?
This would be our leverage index.
Sfhs are a recent phenomena for a rental investment vehicle. .Multi family has always been the traditional way to invest…Self storage is a natural extension of that field…
Actually self storage development is booming…recovering like the economy. .
Growth is actually skyrocketing and going worldwide…A major growth area is RV and boat storage. …Cities don’t allow street parking of these vehicles. .
•Of over 10,000 facilities surveyed, 31% offer truck rental.
•The top-6 self storage companies, including 5 real estate investment trusts (Public Storage, Extra Space,
National Storage Affiliates Trust, Sovran and CubeSmart) plus U-Haul (a public company / non-REIT),
own, operate and/or manage some 5,800 self storage facilities, or about 12% of all US facilities. Several
public companies are now offering third-party management of facilities owned by other investors.
Hundreds of facilities are now being managed by the three public companies that have moved into this
service area.
•In addition to the public companies in the industry (above), there are more than 150 privately held
firms that own and operate 10 or more self storage facilities. In addition, there are some 4,000 firms
that own and operate from 2-9 self storage facilities. Lastly, there are more than 26,000 firms that own
and operate just one facility.
•There is a total U.S. self storage space capacity of about 21 sq. ft. per American household.
•There is 7.3 sq. ft. of self storage space for every man, woman and child in the nation; thus, it is
physically possible that every American could stand – all at the same time – under the total canopy of
self storage roofing.
•About 13% of all self storage renters say they will rent for less than 3 months; 18% for 3-6 months; 18%
for 7-12 months; 22% for 1-2 years; and 30% for more than 2 years.
•Some 68% of all self storage renters live in a single-family household; 27% live in an apartment or
condo.
•Some 65% of all self storage renters have a garage but still rent a unit; 47% have an attic in their home;
and 33% have a basement.
•Some 47% of all self storage renters have an annual household income of less than $50,000 per year;
63% have an annual household income of less than $75,000 per year.
•More than 1.5 million self storage units nationwide are rented to military personnel (6% of all units);
however, in communities adjacent to domestic US military bases, military occupancy can be from 20% to
95% of all rented units.
•SSA members value military personnel as self storage customers and traditionally extend special
incentives and discounts to those with a valid military ID card, such as: 10%-30% discounts off rental
rates, free months of rent, gift certificates, free use of moving truck, “one-dollar move-ins,” no rent
increases while deployed overseas, waiver of security deposits, administration fees, etc.
•It took the self storage industry more than 25 years to build its first billion square feet of space; it
added the second billion square feet in just 8 years (1998-2005).
•83.9% of all US counties (or 2,634 out of 3,141) have at least one “primary” self storage facility.
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Uhaul is an interesting stock…a pure bet on the economy. $24 in 2009 , $396 now…When the economy gets good mobility increases…Finally millennials are moving out from their parents basements…Plus Uhaul really has no competition in most small towns. …In South Lake Tahoe Uhaul just built tons of self storage…Zero vacancies for housing and self storage in our town…
The need for self storage is simple to understand. .There is not enough housing. So people rent smaller spaces than they need…Housing isnt being built where needed…Self storage helps provide the extra space needed and costs 80% less to build and rents for the same per sf as nearby apartments.
It is not just a case of storage of uneeded junk…There is a constant need to storage for people on the move…Traditionally Americans moved every 5 years…It went to 10 years during the recession. .People hunkered down…Now they are moving again…Huge potential for self storage, PODS, UHaul, moving companies and furniture companies, Home Depot…etc.
People are actually moving more than I thought. …More moving equals more need for self storage
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Lol, the whole point with capitalism is to raise capital from somewhere else to support your venture. Could FB, TSLA, Baba, etc succeed without some big time borrowing to begin with? What real estate investors are doing is small potatoes compared to that.
So yes, borrow your heart out! The more the merrier 
And yes, we don’t want socialism. It hinders progress.
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Why don’t you share your own stats first? People are more willing to share theirs if you share yours…
Simplistically speaking, Is it true that democrats favor strict lending against able borrowers to prevent inequality? And republicans favor ability based lending policy to prevent against default?
Obama tightened lending and trump wants to remove some part of frank Dodd.
Let’s get more scientific. Here’s a poll on the overall RE LTV. If there’s enough sample, we can try stock margin usage as well.
http://www.easypolls.net/poll.html?p=598756bae4b0b15e0af18a73
LOL… you better be the first person to enter an entry into that poll then…
I don’t mind sharing. 47% for real estate.
Individually, even recent purchases are under 60% due to strict lending… e.g. last loan was $1060k on $2000k value, before that $1530k loan on $2850k value. Even with moderate appreciation and 30yr amortization, it goes under 50% LTV super fast with such starting points. Most of our commercial loans amortize over 25 years, so the LTV sinks even faster.
If your question was to determine risk of default, I think you should ask for participants’ debt coverage ratio.
E.g. monthly PITI = $3000, rent = $3300… = 110%
More precisely, one should add landlord paid utilities, paid services and a repair reserve to the PITI number.
I believe the 2007-2010 crash happened because too many people bought SFR rentals and the rental income could not cover the debt, especially when rates increased.
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Wrong. Crash happened because too many homeowners had next to nothing down. Has nothing to do with investors and rentals.
Again, if you read what I wrote I said down the line. People in general are not going to want to waste their last few dollars on rental space when frankly in extreme cases can live on the streets in RVs and tents for free. Yes, obviously if the stats indicate that self-storage facilities are doing well now I can’t refute facts but I don’t believe they are good investments LONG TERM. Just like again, shopping malls, did anyone really at the beginning thought they would be a dinosaur soon? Perhaps, no, because at the time Amazon was wavering and potentially going to flat line but obviously things changed and they are the elephant in the room now. Things change, gentlemen. If you go back to my one post where I line by line gave some reasons, try to refute each item. You can’t, because that is what is happening today. No assumptions, no guessing, facts. Future generations like millennials have not shown any inclination of wanting to hoard things or maintain lavish home lifestyles. They live in a disposable world. They live in a gig economy and are willing to migrate at any given second. Does that mean they would want to spend hard money on storage space? Very unlikely. Tell me what is in those storage lockers that one really couldn’t store at home anyway? If push came to shove, people will throw things away or donate them if it comes down to another bill. Obviously there will be those stupid people who will do as you say, but I am talking in aggregate. No way.
That’s fine. If I were to get into self storage I don’t want every single investor to go there with me. That just jacks the price way up. I draw a different conclusion from the trend I am seeing.
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Fine, it is your dime. On that same logic, then you should also invest in shopping malls too right? Fewer investors mean big dollars to you, Mr. single investor…(SMH)
And while you are at it, go open up a book store too…
Be careful. High risk high reward, no doubt, but in a down market, storage spaces (like commercial) are probably going to fall in value much faster. Also, people are more likely going to get rid of their storage spaces first. They still need a place to live.
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That’s flawed logic.
You are arguing the millennial generation is fundamentally different from previous generation. They have less material possession. I say no. Give them some time and I think they will have just as much if not more than Gen X as they age.
But where do they buy their stuff? Of course it’s online.
What stays the same is the human character. What changes is the technique.
As Bezos said before, focus on what doesn’t change.
I agree that down payment is a factor. But not the only or single deciding factor.
Most people default because they cannot make the payment. Having put in a down payment may motivate them to find the money to continue to pay (second job, room mates, whatever it takes).
Investors buying up second homes for speculative reasons drove up prices, esp in Phoenix, Las Vegas, Florida etc. The fact that their rents did not cover the houses is certainly a big factor there.
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You guys seen “The Big Short”? Stripper bought 5 houses with liar loans.
Warning: NSFW!
Now, that is flawed logic, especially when our own Millennial starlit, Ms @harriet, said NO WAY. You want to equate having some storage space at home (which agreed, people want and WILL HAVE) to going out on a limb with paying for offsite storage somehow. That, is flawed logic…