Self-storage is an industry that has been growing significantly in recent years, with the demand for space increasing as people’s lifestyles change. The global self-storage market is expected to reach USD 89940.75 million by 2028 at a CAGR of 7.5%, according to GlobeNewswire.
With the rising demand for self-storage facilities across the United States, investing in the right state can be a profitable choice for investors. Whether you are looking to invest in self-storage facilities or planning to own a storage unit, picking a state with high returns on investment is crucial.
Read on to find out the 11 best states for self-storage investment. Check out this article if you want to explore 7 reasons why self-storage is a good investment.
1- Texas
Texas is one of the best states for self-storage investment because of its growing population and strong business climate. In 2020, Texas had the highest number of self-storage facilities, with about 5,234 self-storage facilities, according to Statista.
Also, tax-wise, Texas is friendly to businesses, making it an attractive option for potential investors.
Moreover, Texas has a diverse economy, with industries like healthcare, technology, and energy, which means there are more opportunities for storage businesses to thrive in various cities.
2- Florida
Florida has a high population growth rate, which translates to an increased demand for storage space. With its growing population, demand for storage space is on the up, making Florida one of the best states for self storage investment.
In addition, Florida has a diverse economy, with the tourism, agriculture, and construction industries contributing significantly to the state’s economy.
Furthermore, due to its high humidity levels, Florida’s storage facilities require air conditioning, providing an added revenue stream for investors.
3- Arizona
Similar to Texas, Arizona offers plenty of tax incentives for those who want to invest in self-storage. And with a stable economy, vibrant population growth, and established infrastructure, Arizona offers a robust self-storage investment market and favorable tax rates.
For example, Phoenix was ranked number 5 in the United States for self-storage investment (Source: AZ Big Media) And, due to the hot and dry climate, the need for air-conditioned storage units is high, which might also increase your revenue.
4- North Carolina
With a population of over 10 million people, North Carolina has strong social and economic fundamentals that drive self-storage needs (Source: United States Census Bureau). The thriving city of Charlotte, North Carolina, alone has a high number of self-storage facilities.
With several major companies setting up shops in cities like Charlotte and Raleigh, the demand for self-storage facilities in North Carolina continues to increase, making it an attractive investment location.
5- Georgia
With a low cost of living and a strong job market, Georgia is an excellent option for investing in the self-storage industry. In addition, Georgia’s transportation infrastructure, including its ports and highways, makes it easy for small businesses to transport their goods and require self-storage space.
Also, Georgia’s robust economy, alongside its booming population growth, makes it one of the best states for investing or starting a self-storage business. However, in 2023, the average cost of a 10×10 storage unit experienced a decrease of 9% compared to last year ($141/month in 2023)
6- Tennessee
Home to a growing number of metropolitan areas, Tennessee’s vibrant economy and growing population make it an investment destination worth considering for self-storage investment.
Also, the low cost of living, no state income tax, and With major cities like Nashville experiencing recent population booms, Tennessee makes the list of the best states to consider for self storage investment.
7- Colorado
Although it may not be known for its storage facilities, Colorado offers an optimal environment for self-storage investments, including a favorable tax climate. Its solid economy, diversified construction, and relatively low unemployment rates make it an investment-worthy state.
Colorado’s natural beauty, with several national parks and a thriving tourism industry, also presents an opportunity to attract visitors who need storage space while they visit.
8- Ohio
The state of Ohio has a strong and diversified economy, which translates into a high demand for storage space. The Buckeye state’s affordable cost of living, access to major markets, and growing population make it an ideal state for investors seeking to get into the self-storage industry.
Ohio state’s strong population growth, including the metropolitan areas of Cleveland and Cincinnati, makes it an attractive investment site.
9- Indiana
Indiana is a great state for self-storage investment because of its booming economy and low cost of living. According to research by SpareFoot, the average consumer price of a storage unit in Indiana increased from around $50 to over $70 between 2010 to 2017.
In addition, Indiana’s business-friendly policies create an environment where small companies can thrive, thus increasing the demand for self-storage spaces.
10- Washington
Washington is a state known for its strong tech industry, with companies like Amazon and Microsoft located in the area.
The tech industry’s growth translates to an increase in demand for storage spaces, making Washington an attractive state for investors.
From 2010 to 2017, the average consumer price for a storage unit in Washington increased from around $70 to over $100 (Source: SpareFoot)
11- California
Although one of the most expensive states for self-storage investment, California’s growing population, and diverse industries make it an excellent option for investors.
The demand for storage space is always high, and with a favorable climate, the need for air-conditioned units creates an added revenue stream. However, in 2023, the average cost of a 10×10 storage unit in Los Angeles experienced a decrease of 1.5% compared to last year ($259/month in 2023)
What to read next:
- 7 Creative Ways to Create Wealth with Real Estate Investment.
- Top 9 Best Real Estate Investing Books For Beginners.
- 6 Reasons Why Real Estate Is a Good Investment.
Final Thoughts
Investing in the self-storage industry is an attractive option if you are looking for alternative and recession-proof revenue streams. However, I believe that success in investing in the self-storage industry depends on several factors, including the location of the storage facility.
In this blog post, I outlined 11 of the best states for self-storage investment to help guide your decision-making process. By examining factors like the state’s economy, population growth, and business-friendly policies, you can pick a suitable location and increase your chance of success in investing in this industry.