Self Storage help and or thoughts
Just a question on the valuation of a self storage facility. This property has not been in operation for several years and is in a high traffic area. The area is not that great and several homeless have become residents of the office.
There are 53 units in the property and the agent believes that at 100% capacity will gross about $5300 per month. I believe this is on the high side and think a more conservative estimate is 3K per month. My other concern is that the lot is sloped down from back to front and about 20 of the units are not level with the ground and the tenant would have to step up into the unit which would lower the rental income in my opinion.
I believe it will take about 20-30K to get the property operational again. The property is listed at 85K below the county appraisal. It has been on the market for over 400 days.
My original thought was that if I could make it a 15 cap then it may be worth a shot. With the area and other factors I'm just not sure what would be a safe number to purchase the property at.
Any help would be greatly appreciated.