Self Storage Garages

11 Replies

Recently acquired two 16 unit self storage complexes. I'm not to familiar with the ins and outs of self storage garage management (we mostly deal with SFR).

Does anyone have a good self storage garage lease that they would be willing to share?  Or any tips for an investor new to self storage?

*Property is in Delaware

Originally posted by @Jeff Sheraton :

Recently acquired two 16 unit self storage complexes. I'm not to familiar with the ins and outs of self storage garage management (we mostly deal with SFR).

Does anyone have a good self storage garage lease that they would be willing to share?  Or any tips for an investor new to self storage?

*Property is in Delaware

 Congrats! 

Quoting Sgt Schultz "I know nothing" of self storage units. Well maybe a little, but its ancillary knowledge that wouldn't be useful to operating an ongoing self storage operation.

I'm a learn as you go kind of guy, and have gotten myself in over my head on more than one project or two, so can kind of relate to your acquisition.

Can I ask you what drove you to buy a self storage property (and hopefully the answer is a value opportunity) without prior knowledge of the business operation?

Hey Christopher,

Welcome to the Wonderful world of Passive Real Estate Income, Without Tenants, Toilets, and Trash! 

For the Rental Agreement: Go to the Delaware Self Storage Association website to find out how to buy one if you don't want to become a member.  However, I strongly suggest you join to shorten the learning curve and network with other owners. 

Cheers! 

P.S. - Drop the word "Garages" - You own a Self-Storage Facility with "Units". 

To your Success, 

@Scott Meyers

I'm intrigued ... how do you avoid the trash?   I've been looking a a facility here and one of the things I noted was the amount of "stuff" abandoned.  The current owner puts dumpsters across from the units, which has helped some.

Chris: The numbers just made sense.  The first complex we paid around 10% of what it was worth (via sheriff sale).  The second complex was purchased from a seller who posted an ad on craigslist (he was from Texas, garages were mismanaged and just wanted out).  We paid about 30% of what it was worth.  The other bonus to the deal was that we needed some storage for our business, now we don't need to rent it.  

Scott: Thanks for the tip I will check it out.

Originally posted by @Roy N. :

@Scott Meyers

I'm intrigued ... how do you avoid the trash?   I've been looking a a facility here and one of the things I noted was the amount of "stuff" abandoned.  The current owner puts dumpsters across from the units, which has helped some.

 Roy,  we NEVER put dumpsters on our site - if you do, guess what?   Yeah, they'll throw their trash in it!     From time to time we throw things away, but when our units are auctioned off, they have to buy everything.  And if these folks don't want to get charged another month for their "stuff"  (aka trash) then they better take it all with them.   

@Scott Meyers

I do get the point about the dumpsters, that was my first impression when I saw them at the self-storage place here (owner's paying to dump someone else's trash).   

What is the abandonment rate - i.e. how often do folks put stuff in storage, pay the first quarter (or year) and disappear?   

Originally posted by @Roy N. :

@Scott Meyers

I do get the point about the dumpsters, that was my first impression when I saw them at the self-storage place here (owner's paying to dump someone else's trash).   

What is the abandonment rate - i.e. how often do folks put stuff in storage, pay the first quarter (or year) and disappear?   

 Very few - and in most cases, we set our customers up on autopay which limits our receivable exposure. 

@Jeff Sheraton

  I am not an expert at this by any means.. I owned on facility it had 44  10X20's with 7k sq ft of commercial on top.. its was not a metal storage type facility it was all brick and sticks built with sheet rock walls etc.. it was located right next to the Columbia river so my tenant were all house boaters.. ( its was great) I then put a condo plat on them and sold them off individually ( very nice play)  So the house boaters could add this Garage to their homes increased the value of the floating homes..

I can see why an out of state investors either let it go for tax's or what have you 16 units would be totally inefficient to try to manage from a far..

If I went back into the space again  I would only buy a facility that is large enough to Have ON site full time management.. your time gets killed trying to show one garage that is going to rent for a 100 a month.

As for trash because my units were so nice one double actually had a bathroom in it.. I got one hoarder squatter.. next thing I new it was full to the rafters and the dude was living in it.. that was fun....

But generally the few that got abandoned we just threw the stuff away.. just like you would turn over a SFR.

the 7k sq feet above this was mid recession so we had a lot of vacants I repositioned that into Heated storage and rented them all out.. Much better than renting offices and dealing with those folks.

good luck with yours.

@Jeff Sheraton  

I know this thread is a bit old but I just stumbled upon it. I recently spoke with a newer management company in the area (Rentwell) and they do self storage/garages. I know their leases for rental properties are top notch so i'm guessing they will have a solid lease for self storage as well.  

Also, I am getting into self storage investing as well so if you come across anything you don't want or cant take down hit me up. I have a small mailing campaign dropping today for self storage in Wilmington. 

This post has been removed.

Originally posted by @Jay Hinrichs :

@Jeff Sheraton

  I am not an expert at this by any means.. I owned on facility it had 44  10X20's with 7k sq ft of commercial on top.. its was not a metal storage type facility it was all brick and sticks built with sheet rock walls etc.. it was located right next to the Columbia river so my tenant were all house boaters.. ( its was great) I then put a condo plat on them and sold them off individually ( very nice play)  So the house boaters could add this Garage to their homes increased the value of the floating homes..

I can see why an out of state investors either let it go for tax's or what have you 16 units would be totally inefficient to try to manage from a far..

If I went back into the space again  I would only buy a facility that is large enough to Have ON site full time management.. your time gets killed trying to show one garage that is going to rent for a 100 a month.

As for trash because my units were so nice one double actually had a bathroom in it.. I got one hoarder squatter.. next thing I new it was full to the rafters and the dude was living in it.. that was fun....

But generally the few that got abandoned we just threw the stuff away.. just like you would turn over a SFR.

the 7k sq feet above this was mid recession so we had a lot of vacants I repositioned that into Heated storage and rented them all out.. Much better than renting offices and dealing with those folks.

good luck with yours.

 I agree that going too small can be problematic.  My only caveat to this is that you need to be big enough to be able to hire one part time manager, not full time.  I have a 30,000 square foot facility that hums along with an employee who works 16 hours per week in the office (plus 1-4) for after hours appointments. I also have a 20,000 square foot facility close to home that I self manage.  The no shows are annoying but they can be minimized with strict adherence to some simple scripts when setting the appointments.  All in, the 20,000 facility takes up about 5-10 hours per week.  Not sure It would have been a deal if it would except that  it has room to grow to 25,000 which will get it to "part-time Manager" status and allow day to day operations to be delegated if desired.  

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