With a total market size of $48.02 billion and projected growth of 5.45% through 2026, the self-storage industry will not disappear overnight. While recent events due to the coronavirus pandemic have slowed business and forced some owners to lower storage costs – this business climate creates the perfect opportunity for a new investor to buy self-storage facility.
With a new self-storage investment, you can enter the market ready to offer lower storage prices with headroom to grow as the market begins to normalize.
Let us help you begin your purchasing journey with how to invest in self-storage ahead.
Research Before You Buy Self-Storage Facility
Purchasing any type of business is not a small decision. Instead, it is a life-changing decision for many would-be investors, especially when buying a self-storage facility.
Are you even sure that you’re ready to own a self-storage facility yet? Are you planning on managing daily operations yourself? Do you know how many hours a week you will be working? Do you have the right skills to help produce profitable revenues for the facility?
Why not attend our upcoming Self-Storage Academy to learn more about starting and growing a successful self-storage business? Don’t start your investment journey alone.
What to Look For When You Find a Self-storage Facility
So you’ve narrowed down your list of self-storage facility investments in your area, but do you know what to look for internally? Here is a shortlist to consider when comparing self-storage properties.
- Location of facility
- Population in the facilities area
- Overall condition of the facility
- Current management and staff
- The current price per storage unit
- The types of storage units available
You will soon find out that not all self-storage facilities are created equally. As you develop your own specifications list, you will start to notice critical factors that make certain self-storage facilities more desirable than others.
If you still aren’t sure what to look for in a self-storage investment property, then take a look at our guide. It will help you to avoid the seven most common mistakes that new investors make.
Ask Questions About Your Self-storage Investment Options
With 52.3% of all self-storage facilities owned by small business operators, you are in good company – and competition. The more due diligence you perform, the better off you will be when you take over ownership of your self-storage investment.
Some great questions to ask are:
- Why are they selling the storage facility?
- Will the owner and staff stay on after the sale is made, and for how long?
- What are the current expenses of operating the self-storage location?
- What is the occupancy rate of the facility?
- Are there any security measures in place on the property?
- What is the condition of the overall property and its assets?
- How are payments collected for storage tenants?
Don’t forget to ask about financial documents, contracts, occupancy reports, and tax statements for the business, too.
Analyze the Asking Price for Similar Self-storage Facilities
When analyzing the asking price for a self-storage investment, the Self-Storage Association can provide you with the tools and analysis for understanding a fair price in your location. With your own research and market insight from the Self-Storage Association, you can begin to consider a fair asking price.
Don’t hesitate to ask if the facility owner received an estimate from a professional valuation service or not.
If they don’t have a professional valuation, you have more room to negotiate. The more information you have, the better you set yourself up for negotiations later.
Don’t Be Afraid To Negotiate Your Final Price
Negotiations and contracts are not to be taken lightly. Therefore, it’s best to have professional guidance and legal help before you buy self-storage facility. That said, if you have done your due diligence and narrowed down your property list, you can contact us for further guidance through the entire buying process of your chosen self-storage facility.
Our mission at Self-Storage Investing is to supply you with the tools that help you produce profits from your self-storage investment. In addition, gain access to a community where thousands of self-storage professionals gather from all over the world supports the success of each other.
