Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

US Housing Market - Goodbye Hotel California

Housing-Market / US Housing Jul 19, 2017 - 03:02 AM GMT

By: Rodney_Johnson

Housing-Market Not everything about my recent move from Florida to Texas was tough. I didn’t enjoy the packing and cleaning, or the unpacking and more cleaning. But there was one thing that made me smile.

I kicked my storage unit to the curb.

Five years ago we decided to downsize. There was no way to put 4,000 square feet of furniture into 2,100 square feet of space. We made tough decisions on what to keep and what to give away or sell, but in the end we had a few items that had no home in the new house, but we couldn’t part with.


It all came down to a loveseat.

My in-laws had refinished an antique loveseat and given it to my wife when she first went out on her own. It’s a nice piece. But there was no logical place for it in the new house, and (obviously) we couldn’t get rid of it. So I bit the bullet and rented a storage unit.

“It’s fine,” I told myself. “We’re adding on to the house, so it’s short term.”

But the guy who worked at the storage place new better. When I signed up and mentioned that I’d be there about six months, he smiled.

“Everyone says that,” he told me.

We never added on. And we never emptied the unit. What did happen was $100 per month for exactly five years.

That antique loveseat cost me $6,000. I don’t think I could sell the thing for more than $200-$300, but as I tell my wife, the piece is priceless because it’s important to her. I didn’t get this far along in my marriage without learning a few things.

Storage is like the Hotel California. You can check out, but you can never leave. If you have a unit – or two – chances are you’ve had them for years, and there’s no end in sight

We sit at a strange crossroads when it comes to stuff and storage. The Boomers are the richest generation in history, and have collected a bunch of things. But they’re getting older…

As they move to one-story houses and 55-and-over communities, they’ll have to make choices. Do they chuck everything that doesn’t fit in the new place, or stick it in storage so they can pass it down? I’m betting on storage. It puts off the hard decisions and the pain is minimal.

So the explosion in self-storage units, from just the old Public Storage (NYSE: PSA) locations and mom-and-pop stores to fast-growing companies like Extra Space Storage (NYSE: EXR), will most likely continue in the years ahead. (EXR’s latest quarterly data reported a 14.6% year-over-year increase in revenue, and the real estate investment trust’s annual dividend yield is 4.03%.)

The industry plays on the emotions of Americans that get pretty attached to stuff and can carry the added expense.

For investors that like the steady income generated by such companies, this is good news. But as my personal example shows, over time the personal expense of owning a storage unit adds up.

Recently, a friend in Vegas (thank you, Ken!) showed me another way to attack this problem. He, too, had rented storage space, and was paying a pretty penny every month just to keep stuff. As his monthly expense climbed over $1,000, he decided he’d had enough.

He searched his neighborhood, found a small home not too far from his house, and bought it. After slight modifications, he’s turned it into a glorified storage unit, although it comes complete with a kitchen and bathrooms.

A photo from my friend Ken’s “storage house.”

He even carved out some space for his wife to have an office, ridding himself of another monthly expense!

Taking this approach involves a few variables.

My friend bought the small home for cash, so he doesn’t have to pay debt service, although he still must cough up for association fees, taxes, maintenance, and upkeep. But he participates in the capital fluctuation on the home.

Essentially, he got rid of a monthly expense (storage) and turned it into a useful investment (real estate). It’s as if he owns a rental in a nice neighborhood and is leasing it to himself. Brilliant!

Not everyone can do this, of course, but just think of the possibilities.

In addition to using the property for storage and a small office, it could also serve as guest quarters, particularly for adult children that come home for either a brief or extended stay.

With my last college kid home for the summer, it crossed my mind that if I had such a unit nearby, I wouldn’t wake up to the front door opening at 1 a.m., find half of my groceries gone, or have to play Tetris with the cars in the driveway. And when out-of-town guests visit, it’d be an automatic hotel.

Before you start paying closer attention to “For Sale” signs on your daily commute, consider that real estate prices are quite high, while incomes remain stagnant. Now is not the best time to jump into the game if you can’t stay for the long haul.

(Perhaps a strategy like Charles’ Peak Income service would be more feasible for you to

But if you can create your own storage unit and own it for the foreseeable future, then this could be a great option.

Eventually, the Millennials will buy homes in droves, wanting to put down roots for their young families and chase the American Dream, which should push prices higher in the late 2020s.

That might just give you enough time to figure out what to do with all that stuff.

Rodney

Follow me on Twitter ;@RJHSDent

By Rodney Johnson, Senior Editor of Economy & Markets

http://economyandmarkets.com

Copyright © 2017 Rodney Johnson - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Rodney Johnson Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules