What Are the Minimum Criteria For a Self-Storage Property?

Before you waste time researching a property, you need to make sure that the property meets a few criteria. You need to make sure that the property has an upside potential, you need to make sure that it is a minimum of 3 acres, and you need to make sure that it has a minimum of 50,000 square feet.

As you start finding properties with motivated sellers, you need to make sure that you know what you are looking for. You need to put together your minimum requirements. You are not looking for properties that are fully rented and at their prime. Those are going to sell for top dollar. You are looking for the properties that have a 50% occupancy level or less. We are looking for properties that have the potential to be developed or expanded. We are looking for properties that can be converted into self-storage. We are looking for the needles in the haystack.

You are looking for a fixer upper, but it has to meet a few qualifications. You need a property that has at least 3 acres of land. Three to five acres is the perfect lot size for a self-storage facility. You also need to have the right zoning in place. Yes, you can always try to get a zoning change approved, but that can take anywhere from a few months to a few years.

When you are looking at the building itself, you need to make sure that the property has enough square footage to work for what your plans are. The minimum that I look at is 50,000 square feet. When you are evaluating the property, look at it to see if there is a possibility of adding a second floor. That would double your square footage without increasing your managerial costs significantly.

When you are looking at the upside potential of the property, you want to make sure that you buy right. You want to be able to get a property at the right price so that you can fix it up and then sell it three to five years down the road for a significant profit. You may decide to keep the property instead of selling it, but you want to go in with the thought that you are going to sell the property for a profit. If you have that in mind, then you can make sure that you obtain the property at the right price.

As you start looking at what is on the market, look and see what has potential. Are there properties that you should research further? Are there owners that you should start reaching out to? This is a great time to start looking into self-storage don’t delay. Instead, start looking for properties that fit this criterion today. As always, happy investing.