Have you watched the A&E TV show Storage Wars?
People bid for property left by storage bay tenants who stopped paying their rent. The bidders can’t go inside the units and only get five minutes to take a peek and decide how much they’ll pay. Sometimes they find some valuable goodies, such as rare paintings, and other times the stuff is worthless. So it’s kind of a crapshoot.
From a landlord’s prospective, though, think about how this storage business works …
If the tenant doesn’t pay within a week or so, you put a giant-sized chain and lock on the door. At that point you’re free to throw their possessions away or sell them, like happens on the TV show. The stuff is gone, you sweep the place out, maybe change the light bulb, and watta bing watta bang … you’re ready for the next tenant.
Local laws might vary somewhat, but you get the point.
I’ve owned and managed residential property for over 25 years, and getting dead-beat tenants out is tough. It can take months, and you could end up with half-a-dozen government agencies involved before it’s over.
Now, I hope you understand why I absolutely love self-storage REITs, like PSA, which is up 58.6% (plus dividends) since I put it in the portfolio on March 14, 2010.
For the week ending April 27, 2012, the e-FinancialWriter REIT portfolio is up almost 26% since implemented, not including 4% in dividends! Once again proving that real estate deserves a piece of your investment portfolio.
Closing price 04/27/12
Return to date %
Dividend yield %
return of REITs in portfolio*
Avg dividend yield of REITs in portfolio
12-mo return S&P 500
*Does not include dividends paid
If you have trouble seeing the chart, just in zoom in with your web browser.
Senior Housing Properties (SNH) will report it first quarter 2012 results on Monday. I’ll give a recap in a future posting.
Enjoy your weekend!
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