Self Storage Investment Articles

When you look at most listings for storage facilities, you will note that a common term used to describe them is their “cap rate”. So what is a “cap rate” and how do you know when it’s too high or too low?

Nothing can make or break your deal more than improper negotiation. You can do the greatest analysis and have terrific operational skills but you’ll never own a storage property if you can’t agree to a price the seller will sign the contract at. So what are the main skill sets required to be a great negotiator?

With the New Year upon us, there’s little time to waste if your goal is to acquire a self-storage facility in 2020. But it’s one thing to talk about it, and another to actual do it. When approaching something as significant as buying a storage property, there’s an established play book that has very concrete, step-by-step directions, if you will simply follow what others have learned over the years. So what are the steps?

One thing is for sure about self-storage facilities: they are extremely stable investments. They have very consistent revenues and very high levels of success. But why is that?

Most Americans are conditioned to believe that the prettier the real estate asset, the more money it generates. This is normally true, in asset classes ranging from apartments to hotels to retail centers. However, it’s not always the case in the self-storage sector – and that’s a good thing for many investors. So why do ugly self-storage facilities often outperform that pretty ones?

The U.S. economy is in anarchy. The stock market is plunging, oil is collapsing, and world markets are in jeopardy. So where can you invest in a troubled world? The answer is self-storage. It’s one of the few niches that actually performs as well in times of turmoil as it does in times of economic vibrancy.

There is a ton of bad information out there on the self-storage or mini-storage industry. Contrary to what you may read, there is virtually no money in building new facilities or buying them at a 7% cap rate. If you really want to make money in self-storage, you have to put in significantly more work, and follow a different game plan entirely. Buying an established facility with good occupancy at market rents will not lead to great riches ' only endless concern over making the note payment. The way to success is much more basic.

Buying a self-storage facility is a lot harder than you think - particularly if you want to make money with it. Over the years, there are some basic traits that separate winning facilities from losers. And that genetic code is hard to break. There are many people who will tell you all about how to buy a self-storage facility, in order to sell you a book, course or boot camp. But they really have either limited or no experience. The concepts we're going to tell you here are based on real-life information (and plenty of it) from operating one of the largest websites devoted to the industry. And it may be a lot different from what you've heard before.

There is urban legend going around, created by some "gurus" trying to sell their books, that you can manage an entire self-storage facility from a "kiosk", basically a walk-up automated teller like an ATM machine. Although the concept of having a "robot" manage a self-storage facility is attractive from a cost-savings and low management perspective, it is, unfortunately, a fantasy with about as much practicality as the photon torpedo out of Star Trek.