'It's So Boring,' But Kevin O'Leary Says This Little-Known Real Estate Play That Sends Him A Check Every Month

Kevin O'Leary recently revealed one of his favorite real estate plays: climate-controlled storage. Yes, the business of renting out space for people's extra stuff might not sound glamorous, but according to O'Leary, it's exactly that simplicity that makes it a moneymaker.

Why Self-Storage Works

People often tell him, “It’s so boring,” O'Leary said on a recent podcast before continuing, “I get that check every month. That’s what I love about it. I love boring and I love cash flow." The self-storage industry is thriving because Americans love their stuff – and often don't have enough room to store it. Self-storage fills a growing need, Whether for old toys, sports gear or even more unusual items like ATMs or disco balls. Over 20% of Americans use self-storage, with another 15% planning to do so soon, according to StorageCafe.

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During the pandemic, demand for self-storage skyrocketed. People needed to clear space for home offices or downsize. Meanwhile, small businesses used storage units as affordable alternatives to costly office space. David Allan, co-owner of Toronto's Apple Storage, told BBC that businesses rent 70% of their units. “Firms moved into self-storage because it was half the price or less [of office space],” Allan explained.

A Growing Industry

The self-storage industry isn't going anywhere. In the U.S., developers added over 53 million square feet of new storage space in 2023. Big cities like New York, Phoenix and Orlando are seeing increasing interest because of growing populations and higher rents. Even though there are challenges, like too many units in some areas, the industry keeps changing and improving. 

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Climate-controlled storage is especially popular because it helps protect sensitive items like electronics, wooden furniture and important documents from damage caused by extreme heat, cold or humidity. These units have systems to regulate temperature and humidity levels, making them ideal for areas with unpredictable or severe weather.

The industry is expanding worldwide. In Asia, side hustles have boosted the need for storage space, especially for small businesses selling things online. Helen Ng, the CEO of the Self Storage Association Asia, said that nearly half of renters in Singapore use storage units for their second jobs. In the UK, the industry made more than £1 billion in revenue last year.

Despite these challenges, O'Leary remains enthusiastic about self-storage as an investment. He points to its reliable cash flow and resilience, even during economic downturns. “It's a hard asset,” he says. “It's never going away.” Unlike other real estate forms, self-storage benefits from relatively low operational costs. For example, climate-controlled facilities can operate with just a handful of employees.

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