property investment

As a property investor I’m always looking for a good deal. But buying residential property can often be stressful – not for the first time this week I’ve been gazumped trying to buy a repossession from a bank (NRAM if you must know – ok, well, it’s not quite a bank, NRAM is Northern Rock Asset Management). Before the bank crashed I saw ‘an opportunity’ to make a fast buck and bought some shares at a rock bottom price in the bank. Well, it was a no-brainer wasn’t it – banks don’t go bust do they?!

So, looking for an alternative investment (my gazump happened the day I paid the solicitor the money so we could exchange) I stumbled across an opportuity to invest in self storage for less than £4000 and with returns running at a respectable 8% with guaranteed increases leading to 12% in year 5 and purchased at a discounted price.

These returns were net of ground rent and management fees. What was there not to like? It would be an ideal idle investment with fixed returns for the first two years and unlike a regular BTL I wouldn’t have to worry about tenants, the next rent cheque, forking out for expensive repairs or the prospect of painful void periods.

New houses in the UK are getting smaller and smaller. Families are packed in to tiny houses without enough storage space. The UK storage market is growing rapidly. Additionally there is a growing trend for small businesses to utilise self-storage centres as a highly efficient and economical platform from which to run their businesses. The BBC reported on this in 2013 http://m.bbc.co.uk/news/business-25336446

There are additional benefits too. As a personal investor, you won’t have to charge VAT to your renters in the same way that the larger storage companies do (subject to not overstepping HMRC’s current £81,000 turnover threshold) giving you an important competitive advantage. Also, because it is deemed a commercial property it can form part of your SIPP.

There are similar schemes for airport car parking spaces and there are also packages available where you can combine your investments. I think this presents a very attractive opportunity – investment returns without all the hassles that come with investing in the PRS.