Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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