Storage Facility Evaluation - Help

1 Reply

I just had an opportunity come up that I wasn't looking for, and I don't fully know how to evaluate it. It's a 4 metal building storage facility with a total of 24 storage units that rent for $600/month each. Taxes are  $10,500/year and insurance is $3,450/year. Industrial type storage with 14 ft roll up doors on each unit. 

What other expenses need to be accounted for, and how what are recommended assumption rates (vacancy, capex, repairs, etc...)

Any guidance would be appreciated. 

@Kirby Davis

These have been all the rage among investors.  I have no experience in this asset class with regards to actual investing.  On the downside risk side of things I'd try to ensure that nothing substantial has changed with regards to consumer metrics and preferences.  Numbers that I'd be interested in seeing over time include: number of these built in your area you're evaluating, the vacancy rate, and how many units have been abandoned (in current state but also over time).  I'd assume abandoned (defaulting, non paying) units are a big drag and cost because not only does it take up a unit, you have to get that stuff out of there somehow.

Good luck.  Maybe someone with more specific experience investing in this asset class will weigh in.