Best markets for getting started in self storage right now?

[Josh Smith]

I’m just starting to learn about self storage and I’m wanting to find the best 3rd tier markets to get started in self storage. Does anyone know any markets that could be good at this time?

[Paul Moore]

Hi @Josh Smith. This is a wonderful question and I’ve got an answer that’s going to make you happy I imagine. In almost any place where the storage to population ratio is in balance or better, you can take a mom and pop self storage facility and convert it to a well run asset and make a lot of money. 

You can find info on the ratio on RadiusPlus.  The new BP book on self-storage explains how the ratio works. You also want to be on a highly traveled road in a visible location in a medium to high income area.

Example 1: we invested heavily in a self storage facility with over 600 units in the tiny town of Beeville Texas. It was acquired from my struggling operator and turned around to make a staggering profit for the operator and investors in just two years.

Example 2: We invested in a fairly large self storage facility in a tiny town you’ve never heard of in the upper Peninsula of Michigan. It is now well marketed, 98% occupied, and extremely profitable.

Example 3: We invested in a self storage asset in the Western Colorado town of Grand Junction.  It was acquired from a mom and pop seller and now it is making wonderful profits for the operator and investors.

One of the benefits in investing in tertiary cities is that large national competitors will likely not show up next door. This is the number one risk and self storage and you are largely avoiding it by going to small towns. Happy Investing!