Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
Trumponomics Stock Market 2018 - The Manchurian President (1/2) - 21st Jul 18
The Death of Japan's Real Estate Dream - 21st Jul 18
SMIGGLE Amazing Mega Shopping Haul, Pencil Cases, Smigglets and Giant Back Packs! - 21st Jul 18
Cayton Bay Beach Caravan Park Holiday - What's it Like? - 21st Jul 18
Gold Stocks Investment Wanes - 20th Jul 18
Diversifying Your Stock Investing Strategies is Smart Investing - 20th Jul 18
Custom Global Stock Market Indexes May Be Sounding Alarms - 20th Jul 18
S&P 500 Just 2% Below Record High, But There's More Stock Market Uncertainty - 19th Jul 18
Stock Market Technical Picture - 19th Jul 18
Gold Market Signal vs. Noise - 19th Jul 18
Don’t Get Too Bullish on Gold - 19th Jul 18
Bitcoin Price Rallies to Upper Channel – What Next? - 19th Jul 18
Trump Manchurian President Embarrasses Putin By Farcically Blowing his Russian Agent Cover - 19th Jul 18
The Fonzie–Ponzi Theory of Government Debt: An Update - 19th Jul 18
Will the Fed’s Interest Rate Tightening Trigger Another Financial Crisis? - 18th Jul 18
Stock Market Investor “Buy the Dip” Mentality is Still Strong, Which is Bullish for Stocks - 18th Jul 18
Stock Market Longer-Term Charts Show Incredible Potential - 18th Jul 18
A Better Yield Curve for Predicting the Stock Market is Bullish - 18th Jul 18
U.S. Stock Market Cycles Update - 18th Jul 18
Cayton Bay Hoseasons Caravan Park Holiday Summer 2018 Review - 18th Jul 18
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

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

© 2005-2018 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