What is Tenant Insurance Really Worth?

For the last several months we have been talking about the uncertainty in the self-storage investment market, due to stock market volatility, looming interest rate hikes, a new development pipeline, and the ever-changing financing market. By most measures the self-storage rental business is reasonably steady, if not booming today. However, over the last several years the self-storage industry has been able to grow and prosper because of its ability to continue to find “bolt on” revenue streams (such as tenant insurance, truck rentals, lock and box sales, and increasing administrative and late fees, just to name a few) which have had a meaningful impact on the value of self-storage properties.

Recently the topic of tenant insurance has been brought to the attention of most self-storage owners and operators as it has become a very profitable revenue stream for many of the large operators in the business. I first must tell you that insurance is regulated state by state and I am NOT an expert in insurance. I would recommend that you talk with your attorney and your state association to better understand the tenant insurance business in your market.