Analyzing mini storage

[Jason Vandermark]

I’m looking at investing in a storage facility but would like some input on the numbers.

160 units mixed climate & non climate control

40 rv/boat spots

Gross rent(includes uhaul) 220,000

Expenses 129,000

NOI 81,000

The expenses aren’t verified and some items seem low. They only have 14,000 for payroll

What do you think would be a fair offer?

[Callum K.]

We've got several Storages that size and Several are in secondary and tertiary markets. Applying a 35% expense calc on that revenue gets you about $77k in expenses. That gets you a a $143k NOI. Acquisition prices typically range between a 6% and 8% cap rate. So $143k/0.08=$1785,000 to $143k/0.06= $2,383,000.

Call that a baseline then discount and add value from there. Discount Uhaul because it will require additional labor to manage, if occupancy is high then if there’s expansion, that’s potential value to be added. Quality of the property also will affect it as you’ll want to look at deferred maintenance. Lastly location is critical. Supply if competition and demand in the area will be needed to look at. Best of luck