Analyzing the Financials of a Self Storage Facility

Simply put, I love self storage. The reasons for this love are numerous and far reaching but I'd be lying if I said that the underlying financials inherent to this industry weren't a primary draw.  While the following is a gross over-simplification, I hope that it will at least serve as a point from which the budding storage investor can start from.

Below is a breakdown of the "typical operating expenses" of a self storage facility.  Obviously these expenses are going to vary from market to market but when all is said and done, a well run storage facility can be run for approximately 33-35% of gross income with only minimal tending to by the principals. 

Expense What to Expect

Property Taxes     Varies Considerably (I pay 7% of gross)

Insurance     roughly 10 cents per year per square foot (2% of gross)

Advertsing      6% of Gross Rent: More in Year 1

Payroll/Benefits      $12 per hour includes Workers Comp./Disability/Payroll        
     -roughly 8% of gross as hours required increases proportionally with size of facility

Office Supplies     .5% of gross

Phone/Internet      1.5% of gross

Grounds Maintenance      3% of gross

Repairs/Maintenance      4% of gross

Trash/Water      1% of gross

Profesional Services     1.5% of gross

Miscellaneous     .5% of gross