locations to buy self storage

[Laxmi Chirravuri]

Hello Everyone,

I am planning to do an investment for self storage units. I really appreciate if someone can help me on this.I would like to know about the below things.

1) What are the best locations for self storage units? I mean what the cities that are on demand to buy.

2)What are the things that I should consider before buying the storage units.

3)How do manage these units? since I live out of town I mean who is going to manage these things for move in and move out? any automated process.

4) What does the competition look like locally?

your help will be greatly appreciated!!

[George Fitz]

Those questions are all big magilla's, and Justin gave you good answers. I would expand on that by saying if you are looking at smaller facilities (< 100 units) that you would self-manage, I would personally look for something within an hour or two from home. You can automate a lot of the management, and you can hire local "boots on the ground" for part time help. But you'll still need to visit the property pretty often since part-time help is, well, part-time. If you are looking at larger facilities where the size and revenues justify a management company, then you could literally own one anywhere and keep tabs on it via the online management software, as well as quarterly property visits.  

Picking a market and location is the secret sauce. I personally feel most comfortable choosing a market I'm pretty familiar with. I like smaller, more rural markets because the cost of entry is lower and competition is usually less fierce. Also, lots of municipalities are making it harder to build new self-storage, with moratoriums and such. So if you can buy a property where there are barriers for new competition to enter the market, then that's obviously a big plus. The general rule of thumb is that people don't travel more than 5 miles to store their stuff. That can be a little more or a little less depending on the size of the market. So if you are analyzing deals, draw a radius around the location and determine the amount of people within that radius. Then see how many square feet of units are also located in that radius. This will give you an idea if the market is under or over saturated. The latest figure I've heard is that there should be 7 sq ft of storage per person, within the radius. So a 5 mile radius of 10,000 people should have 70,000 sq feet of storage. Around 9.5% of households rent self-storage. These are national numbers, so obviously YMMV depending on the market.

Also, I definitely recommend Scott's academy or some type of education before you dive in too deep. You'll learn a ton and it's fun!