Skip to comments.Thinking Outside the Stocks (Investments outside of stocks/bonds that are giving good returns)
Posted on 09/05/2010 4:54:47 PM PDT by SeekAndFind
There is always a bull market somewhere. With the stock market continuing to whipsaw and bonds getting ever-pricier, investors are looking further afield for decent returnsand some are finding them.
Self-storage buildings, anyone? How about abandoned railroad beds, cellular towers, student apartments or parking facilities? Such unglamorous niches, once shunned by the investing elite, are performing well in 2010, even as the Dow industrials limp along.
If you haven't heard about these seemingly arcane plays yet, it may be because the smarter money is getting there first. In some cases, private-equity firms, pensions and college endowments, which are cutting their exposure to stocks, are looking into these and other offbeat investments.
Just ask Ken Nitzberg, chairman and chief executive of Devon Self Storage Holdings LLC in Emeryville, Calif. He says he is fielding more calls from investor groups, and has partnered with institutional investors including the State of Michigan Retirement System and Goldman Sachs Whitehall Funds. He also manages properties for college endowments and high-net-worth families.
Mr. Nitzberg says he got into self-storage in 1993. Initially, "we looked down our noses at it," he says. But after his first venturethe conversion of a strip mall into a self-storage facilityproduced a solid return, he was hooked. Since then, while other investors fixated on stocks or more upscale real-estate projects, Mr. Nitzberg has focused on storage. He says the company now owns or operates 48 facilities in 12 states.
Mr. Nitzberg says many of his properties are producing annual returns of 8% to 10%, and a few are exceeding 15%, "which in a 3% Treasury world is pretty good."
(Excerpt) Read more at online.wsj.com ...
Self Storage units are a good government proof enterprise, there just aren’t enough employees for them to regulate you out of existence.
I know some folks that have cell towers.
They are very well off and live a life of leisure.
RE: Self Storage units are a good government proof enterprise, there just arent enough employees for them to regulate you out of existence.
The main risk ? Barriers to new competition are low, and new rivals can drive down rents in some markets.
If you don’t have money to own all of a self-storage unit, there are REITs that you can own via the exchange traded funds.
Here are a few :
EXR (Extra Space Storage Inc)
PSA (Public Storage Inc)
SSS (Sovran Self Storage)
1k a mo per antenna/repeater
Bed bug sniffing dogs. You get a few of them, and you can write your own ticket.
Some drawbacks to cell tower ownership :
* The towers cause additional liabilities and obligations for landlords, including insurance for property damage or personal injury.
* Lease-contract clauses generally give cell-phone companies the right to terminate agreements with just 30 to 90 days notice.
* Towers also are politically controversial in many communities.
RE: Bed bug sniffing dogs.
Where do you get dogs like these and where are deployed ?
How do they make money ?
Gigolos. With the aging of the baby boomers, there’ll be a plethora of unmarried, widowed and divorced women. Gigolos will be in demand to satisfy their need for companionship. A good gigolo can pull in an annual 8 to 15% return.
Serious?? People who have bought extra junk with credit. Now are in debt. I go to self storage auctions all the time. People are abandoning their storage units left and right.
Making 8% on rental property, purchased for cash.
Won’t buy with a mortgage under any condition!
You also get great milk...make some feta cheese and extra animals for the freezer.
We know someone who got into the self-storage business about 6 years ago. I think it has gone very well for him. Access to the facility and security are fairly automated, and I've never seen more than one employee on site at any given time. Pretty simple business model.