Investors often focus on revenue projections, cap rates, or expansion potential. But the first skill you need in self-storage is knowing when a deal has problems buried beneath the surface. Some issues are obvious the moment you walk in; others only appear when you start asking the right questions. This short guide lays out the main warning signs to watch for before committing to a purchase.
Short Ownership History
When a seller has held the facility only a year or two, it often signals that something did not go as planned. Self-storage is typically a long-term business. Owners who exit quickly may have faced financial pressure, underperformance, unexpected repairs, or operational setbacks. The only real exception is a sale motivated by health or estate situations—but even then, verify the story carefully.
History of Foreclosure
Foreclosures in self-storage are not common. When a facility goes through one, it usually indicates severe mismanagement or a market that could not support the rents. Both situations are concerning. One can be fixed; the other cannot. Treat any prior foreclosure as a reason to slow down and investigate every operational detail.
Unusual Tenant Patterns
National turnover averages roughly 8–12% per month according to 2024 industry reports. A rent roll full of brand-new customers is abnormal and suggests manipulation. If half the roll contains tenants under 30 days old, payment history is nonexistent, and some may not be true customers at all. Inflated occupancy is one of the oldest tricks in the book.
Recent, Aggressive Rent Increases
Rent increases are normal, especially with costs rising in 2024–2025. But a sharp bump in rents immediately before listing the property—particularly increases that have not yet taken effect—deserves caution. Sellers sometimes raise rents to make the trailing 12 months look stronger than reality, leaving you to absorb the move-outs that follow.
Fresh Asphalt or Paint Used as a Cover-Up
Maintenance is expected, but timing matters. Newly sealed pavement can hide deterioration. Large areas of recently repainted doors or hallways may be masking past vandalism. Cosmetic cleanup is fine; disguising structural or security issues is not. Always inspect what lies beneath the new surface.
Neighborhood Security Concerns
Self-storage only works when customers feel safe leaving their belongings. If you see repeated repainting on exterior walls, patches with mismatched tones, or signs of vandalism nearby, you may be buying into a location with ongoing crime risks. Good management cannot fix a weak surrounding area.
Evasive Operators or Managers
A trustworthy seller provides rent rolls, delinquency lists, unit maps, and expense records without hesitation. If the manager becomes defensive when you ask simple questions—or if information arrives incomplete, inconsistent, or heavily filtered—you should assume there is more being hidden than revealed.
When To Rely On Your Instinct
Numbers are important, but they cannot replace your judgment. If something feels off during the walkthrough, the interviews, or the document review, you should pause. Investors often regret ignoring their early discomfort. Listening to your instincts is part of protecting your capital.
Quick Reference: Key Warning Signs
- Short ownership period
- Prior foreclosure
- Rent roll full of new tenants
- Rent increases timed to the sale
- Cosmetic work that hides deeper issues
- Signs of neighborhood crime
- Manager unwilling to answer questions
Final Thoughts
Great storage deals absolutely exist—stable occupancy, predictable income, and room for operational improvement. But troubled properties also make their way to market, and the burden falls on the buyer to separate a solid opportunity from a problematic one. When any of these warning signs appear, slow down, verify every detail, and be ready to walk away. Protecting your capital begins with disciplined due diligence.