Storage unit facility

8 Replies

How do you determine the value of a storage unit facility?  What are the pros and cons of owning and operating?  Any comments or information would be greatly appreciated. 

It depends on what type of storage, the condition, quantity, who will rent them and location.  I do know a landlord who has about 30 garages that he rents out and is happy with them. The maintenance is minimal as are tenant issues. I would start by looking at similar storage structures in your area and maybe talking with those owners. 

cap rate and replacement cost

This post has been removed.

Thank you for the responses.  The help is appreciated. - Susan

Originally posted by @Susan Griffin :

How do you determine the value of a storage unit facility?  What are the pros and cons of owning and operating?  Any comments or information would be greatly appreciated. 

 Hi Susan,

Storage can be a phenomenal investment. Storage facilities are valued based on NOI. That is to say that they are worth a multiple of the Income the generate. The multiple will be market specific but generally speaking class B and C storage facilities usually sell for 8-12 times the NOI (More for class Class A facilities in major cities). You might consider using the search feature on BP which will allow you to tap into the forums, blogs and conversations that already exist to increase your knowledge about self storage. Doing so will allow members to assist you without having to re-type that which has already been written:) From there you can reach out to this wonderful community with more specific questions that might be more readily answered.

No company avatar mediumMichael Wagner, TriCounty REIA of WNY | [email protected] | http://www.tricountyreia.com

Cap rate is best for storage units.
Income, rate, value. IRV formula. Lower the cap rate higher the value. Good storage facilities are very sought after investments commanding low cap rates. Income used is net operating.

Hi Susan, 

Excited that you're exploring the wonderful world of Storage.  Agree with all of the above posts - Value is based on market cap rate dependent upon the market, and the class of facility (A, B, or C).   Several other factors may affect the value as well, as each property has its own unique intrinsic value to an investor. 

Pros:  No tenants, No Toilets, no Trash - and about 12 other Reasons why it trumps all other forms of real estate. 

Cons:  Lots of units to track rental payments.  However, it's easily mitigated with the use of kiosks and industry related property management software.

To learn more, you can go here for a free 6 part Video course on how to invest in Self Storage:   www.SelfStorageInvesting.com/freecourse

Good luck! 

Scott Meyers, Self Storage Profits, Inc. | [email protected] | 1‑866‑693‑5999 | http://SelfStorageInvesting.com