Safest Investments During a Recession: Self-Storage, Industrial, Laundromat
The recent recession due to the COVID-19 pandemic has left millions jobless. On the other hand, those with jobs are struggling to make ends meet. This is the primary reason people are looking for ways to generate passive income.
If you are thinking about generating a stream of income through investment during the recession, this post is for you. You are going to learn how investing in self-storage, industries, and laundromats are great options for you. Let us dive right in.
Why Invest in Self-Storage During a Recession
Self-storage facilities and businesses are trending these days. If you are looking for the safest investment, here is why a self-storage business can be for you.
●High Demand
More people tend to move from one city or town to another due various personal and professional reasons. However, the higher moving costs leave people looking for a cheaper option. This is why storage spaces have high demand these days.
If you have a big house with ample space or a spare garage you do not use, you can rent it out as a storage space and generate passive income. If you have investment capital, you can buy storage space and offer for rental and accumulate wealth with little to no maintenance needs.
●Low Overhead
In a storage space business, the only cost involved is the cost to build, while the cost of maintenance is extremely low. You may not even require electricity. The maximum need might be an electric door for the storage space and a light bulb, that is it.
●Tax Benefits
As a self-storage investor, you can benefit from accelerated depreciation to help offset your income. With tax benefits with low deductions, you can keep more money in your pocket.
●Multiple Options to Invest
You can invest in self-storage during the recession in multiple ways. These include owning your own self-storage facility to keep all the profits; however, this requires capital to build storage space.
Another way is to enter syndication and partner with another investor. This is ideal if you have limited investment capital. However, the return will be handsome as you may be able to get a bigger store through partnering and reap higher gains.
Why Invest in Industrial during Recession
Investing in the industrial sector can help you reap higher financial benefits. However, this will require you to have prior knowledge about the industry and how the market behaves during various economic situations.
That said, if you are wondering about the safest investments during a recession, industrial real estate may be worth considering. Here is why:
●Greater Diversity
Depending on your financial strength, you can explore a wide array of industrial real estate. For example, you can invest in multi-family real estate because people who cannot afford to buy a house during the recession are always looking to rent houses. This ensures that you will start seeing immediate returns after investment.
You can even enter a syndicate investing in a larger multi-family residential or commercial project to see bigger rewards. Need help with investing in the right sector?
Personal Capital’s financial advisor can help you decide the best options for you.
●Long-term Income Stream
While other industries may see an up or down, investing in industrial real estate can give you access to a long-term income stream. Large industrial real estate tends to run for years, and you as an investor or owner do not need to worry about finding another tenant or business for many years to come. It is a one-time hassle, and you can enjoy a consistent stream of income for years.
●High-Demand means Higher Rental
The demand for industrial real estate usually stays high, and industries jump at opportunities to grab any facility that may help them expand their operations. This high demand creates a perfect opportunity for you to ask for a higher rental. You can use the competition amongst the businesses to your advantage and increase the rent. The higher bidder gets the contract, and you reap the rewards.
●Tenant Has Greater Responsibility
As an investor, you can relax as tenants have to bear more responsibility for maintaining the facility. Any damage to the property and the tenant has to get it fixed. This means your investment stays safe, and you do not need to reinvest much out of your own pocket.
Why Invest in a Laundromat during a Recession?
A laundromat is one of the most rewarding and safest investments during a recession. You can create an instant passive income stream with minimal investment while continuing your day job.
●Start with Minimal Inventory
Unlike any other retail business, you can start a laundromat with little physical inventory. This means you do not need to order, rotate or discard products making it a laundromat business easier to manage.
●Consistent Business
Recession or no recession, summer or winter, people need to do their laundry. During the recession, a laundromat is a far better option for people to save money on energy bills. A laundromat wash is far cheaper than what it would cost customers to do the washing at home.
Similarly, you can choose to open a laundromat in a location such as students’ halls for consistent income.
Minimal Employee Requirement
Unlike other businesses that need employees, you can run a laundromat with minimal to no employees at all. An automated laundromat business is just like a self-service business. People come in, pay for the laundry via cards, get it done, and be on their way. This means you do not need to pay labor costs or worry about employee taxes and benefits.
●It is Simple with Potential
You can start a laundromat by investing in a property and setting up the machines. If you are running a typical laundromat, where customers do most of the washing and drying of their clothes, you do not need to worry about hiring staff.
Moreover, you can run a laundromat in more than one location simultaneously without the need to manage multiple employees at different locations. People pay upfront, do the washing, and you get the money instantly in your account.
You can continue your day job while a laundromat generates automatic passive income day-in and day-out.
Conclusion
If you are an investor looking for the safest investment options during the recession, self-storage, laundromat, and industrial real estate are the most recession-proof businesses. Do a bit of research on which of these are more in demand in your local market and start reaping the benefits.
