How to Invest in Self-Storage Real Estate

Learn Self Storage with Scott Meyers

How to Invest in Self Storage

Investing in Self Storage

As someone who’s interested in investments, owning a Self Storage Facility is one of the two real estate investments without tenants. Why and How to Invest in Self Storage?

Benefits of Self Storage

These facilities unlike real estate don’t require a waiting period. If someone doesn't pay after 6 days you lock them out after 90 days you sell their stuff and recuperate your money. Self Storage facilities require little grime work due to it being a metal box. Sizes range from 5x5 to 10x30, unlike the difficulty of removing an old tenant in real estate. Prices varying from a controlled climate storage facility being $75-$225 a month to a standard storage facility being $60-$180 a month.

Buying Opportunities for Self Storage

Similarities to real estate are when looking for a buying opportunity on a storage facility you do have brokers focusing on self-storage as well as sending mailers to individual owners willing to sell and looking through listing sites that people put their facility on. Websites that offer these services are selfstorages.com, and listselfstorage.com being the top two. The best market to look into for self-storage investing is always in your own “backyard”.

To model out and find the competition on your own you get census data by going on citydata.com and googling other facilities within a three-mile radius or hiring a consultant that can do a desktop study for you for a few hundred dollars in the beginning then further down the line prices may increase. When looking for the best zoning area look for what it zoned for and see if it is approved for self-storage by seeing what category it falls into either C1 or C3. If not approved you can stop in and make an appointment to ask someone about the possibility of approval or getting the appropriate zoning.

Financing Self Storage

The average rates being $40-$45 dollar per square foot all-metal single-story buildings not inclusive of the land vs climate-controlled facilities averaging $55-$90 per square foot. When financing a self-storage facility it is the only real estate industry that the SBA offers loans on that is because they see it as a business. SBA loves self-storage facilities due to it having the lowest loan default rate.

There are also many community banks, credit unions, savings, and loans that are for self-storage facilities. As you can see it is not very difficult to get a loan for self-storage. After securing a loan it is also very important to do your own due diligence in self-storage by requiring historical financial information from the seller or broker and walking available units as new investors in self-storage facilities neglect to do so.

Why Invest in Self Storage

Investing in self-storage facilities is a viable source of commercial real estate income for those not interested in dealing with tenants and a low repair cost. For more information on self-storage investing feel free to visit Selfstorageinvesting.com or Passivestorageinvesting.com