How Do I Know What to Look for in a Self-Storage Property?

When you are getting started in a new area of investing, it helps to know what you should be looking for. If you have been investing for a while, you should take a moment to determine if what you are looking for is what you actually need.

There are a lot of properties for sale out there, some of them are even self-storage facilities. Your job is to sift through everything and determine if this property is a good option for you. You do not want or need a property that is perfect. Those properties are being sold for top dollar and there is very little room to make a profit. There is barely room for cashflow. You are looking for the hidden gems or the needles in the haystacks. While that may sound overwhelming, once you have a system in place on how to do it, it is really not that hard at all.

You are looking for a property that has a significant upside potential. Properties that are fully occupied and in great repair are at their prime, there is no room for upside potential. The current owner is charging top dollar and you have nowhere to go from there. Instead, you are looking for properties that are 50% occupied or less. You are looking for properties that have the potential to be expanded or developed. You are looking for properties that can be converted into self-storage. These properties have an upside potential.

You are looking for something that is distressed or needs some work. You are looking for something where the seller is frustrated because they don’t know how to make the property cashflow and so they are willing to sell at rock bottom prices. You need something that you can purchase and then spend a few years fixing up and turning around. Then once you have the property humming along at peak performance, you can either sell it for a profit, or you can keep it and move on to the next one.

When you are looking for properties that can be converted into self-storage, you want at least 50,000 square feet. You can always add a second floor if you need to and if the ceilings are tall enough. You need property that is in an area that is zoned for self-storage. This might be an old movie theater or a big box retail store or grocery store. You usually want these properties on a minimum of 3 to 5 acres of land.

There are a lot of these properties out there, the key is to determine which ones will work for you. Some of them can be converted into self-storage and some can’t. Some self-storage properties have a great upside potential while others are in oversaturated markets. You will need to do your research to determine which it is.

If investing in self-storage properties that had a great return and amazing upside potential were easy, everyone would be doing it. You need to remember that it is going to take an investment of time on your part to find these properties. However, investing in self-storage is worth it. As always, happy investing.