By Marc Goodin, CEO of Storage Authority Franchising
Individual investment risk tolerance is not something you often hear about when it comes to self-storage. Maybe it is because of self-storage’s low risk vs high rewards? Perhaps it is because self-storage is one of the most (even the most) profitable real estate businesses? Maybe because self-storage loans have a very very low failure rate. Maybe because self-storage is recession-resistant?
But just because self-storage has lower risk than another business does not make it the right business for you. If you have very low risk tolerance owning a self-storage or any business may not be for you. I get it, those with a high-risk tolerance are going to say having a 9-5 job for 45 years is the ultimate high financial risk but everyone has their personal beliefs.
If you have a large amount of money in the stock market and have never bought a long-shot stock or an individual stock you might have low investment risk and self-storage may not be for you.
If you have owned a business in the past, built your own home, or bought stocks on margin you may have a high risk tolerance and self-storage may be perfect for you.
If you do not have at least a medium to high risk tolerance buying a self-storage vs building self-storage may be for you. You may find your risk tolerance may limit the size of your first self-storage. Or you may want to pay cash to reduce the risk.
We are having a training conference for our franchise owners later in the month on the 7 top tips to find a great parcel of land. Not knowing your risk tolerance did not make it to the list of the top 7 but it truly is the number 1 factor that holds most people back.
If you have a low risk factor will hurt you in two ways. 1) If you do not have high confidence in your success you are not going to put in the time. The higher your risk tolerance the higher your confidence of success and the easier it is to do the work required. 2) There is no perfect property and low risk tolerance can cause you to reject all properties, including ones that would work.
Franchising is so successful because it provides entrepreneurs the expertise, confidence, and benefits they would not typically have on their own. If you want to learn more about self-storage & franchising check out www.StorageAuthorityFranchise.com or send me an email at marc@storageauthorityy.com and I will send you my book “Is self-storage your Vehicle to Wealth?” which provides the pros and cons of self-storage so you can determine if self-storage fits your risk tolerance.
Imagine how easy it would be to find land and build a self-storage to make your financial and retirement goals come true if you knew you could not fail.
Best Regards,
Marc,
CEO Storage Authority
Ps High Investment Risk is based upon willingness to do the hard work, active learning, investigation, consistent commitment, and building the right team, not mindless belief or blind faith.
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