Self Storage Property Evaluation
Hello All-
I’ve been reading these forums for quite some time but just had the need to join recently:
I’m looking to buy my first commercial investment property and would like some advice or guidance on the deal I’ve been offered. Details below-
150 Self Storage Units on 1.5 acres with major highway exposure in North Houston, Texas.
Built in 2005, currently 87% leased out. Gross income of ~$8,000/month / $96k/year.
Property Taxes - $8,000/year
Insurance - $5,000/year
Utilities (Elec) – $1,000/year
Management Fee - ~$4,800/year (5%)
Potential Maintenance/Repairs - ~$6,720/year (7%)
I have financials for the past 1.5 years and everything appears to be very steady around the 85% mark. Not a lot of turn over although I have come to expect the worst. No major repairs or updating needed. Current rent levels are very low compared to other local units but I would not increase price on units that are grandfathered in to current prices.
The deal is offered to me for $600k. Hopefully I can get him down a little.
Thoughts, suggestions? Things I should consider that I am missing?