Self Storage Investment Articles

When it comes to purchasing self-storage facilities, securing seller financing can often be the key to a favorable deal. While some investors believe this approach is rare or unattainable, the truth is quite the opposite. By understanding the mechanics behind seller financing and how to communicate its advantages, you can greatly improve your chances of success.

Marketing is an essential part of running a successful self-storage business, and effective strategies are often rooted in timeless principles. While there’s no magic formula, there are tried-and-tested methods that can make a significant difference. Here are key techniques every self-storage owner should consider

Saying 'no' isn't always easy. For many, it's a word associated with negativity, often feeling like it's shutting the door on opportunity. But in the world of self-storage investments, understanding when and how to say 'no' is essential for successful dealmaking. It's a tool as crucial as 'yes,' laying the foundation for wise and profitable decisions.

Self-storage facilities that have reached foreclosure often end up at auction, where the lender seeks a fresh start with a new owner. Auctions are designed to provide a quick sale to the highest bidder, aiming to recoup as much of the loan as possible. While the bank might achieve higher returns by listing the property traditionally, the time and cost involved make the auction route more appealing, even if it’s not always in the lender's best financial interest.

Outdoor signage is one of the most reliable ways to communicate with potential customers. A well-crafted sign does more than just identify your business—it acts as a constant advertiser, grabbing attention and keeping your message in front of every passerby, whether they need a place to store their belongings or are simply taking notice for future reference. However, a poorly designed sign can lose that advantage, blending into the background and missing the opportunity to engage potential clients. The effectiveness of your sign hinges on a few key design choices, and getting this right can make all the difference. Let’s explore what it takes to create signage that stands out and delivers results.

When you're negotiating the purchase of a self-storage facility and the seller won't budge on price, you're faced with a tough decision: should you keep pushing for a lower price at the outset, or lock the deal in with the intention of renegotiating during the due diligence period? There’s no one-size-fits-all answer, but here are some key factors to weigh.

Seller financing is an often overlooked but highly beneficial option when negotiating the sale of a self-storage facility. Understanding how this works can significantly impact your discussions with sellers. Let's break down why seller-financed deals make sense and how to explain it in a way that resonates, particularly with older sellers.

When it comes to real estate, securing financing is often the linchpin for a successful deal. But how do you go about obtaining a loan for a self-storage facility? The process may seem complex, but by understanding your options and preparing effectively, you’ll improve your chances of success.

Traditionally, housing in America was based on large spaces. In 1790 the average house was 831 sq. ft., and by 1990 that had risen to 2,000 sq. ft. By 2015 it had risen again to 2,500 sq. ft. But now the pendulum is swinging the other direction and that’s creating more demand for self-storage by those who are “living smaller”. You see this throughout the media including the many “tiny home” programs.

When considering the purchase of a foreclosed self-storage facility, it's crucial to focus on current income rather than construction costs. Often, potential buyers fall into the trap of using the bank’s loan amount or the facility's original construction cost as a valuation guide. However, these figures are largely irrelevant to the actual value of the property in its current state.

Self-storage owners all face a common challenge: how to make their facility stand out. Despite being a low-tech but highly competitive business, it can be difficult to differentiate one facility from another. Here are some strategies to consider for increasing visibility and foot traffic.

When evaluating self-storage facilities for sale, you might come across financial projections labeled as “pro-forma.” These projections often present an idealized version of the property's financial performance, which can be misleading. Let's delve into the pitfalls of relying on pro-forma numbers and how they can lead to costly mistakes.

In the realm of commercial real estate, your success hinges on what you buy. The initial choice of property is where you make your money. Even the best manager can't salvage a poor property choice, while a great property can thrive despite mediocre management. Being a savvy shopper, identifying true opportunities, and distinguishing them from pitfalls is crucial. If you’re unsure, it’s better to wait and learn than to rush in blindly.

As a business owner, you might occasionally face situations where you suffer a loss and wonder whether to report it to your insurance company. Reporting a loss can seem straightforward, but the implications on your future premiums need careful consideration. Here's a straightforward guide to help you navigate these decisions.

It’s a standard piece of advice from lawyers: “Make sure you have it in writing.” Indeed, for many agreements to be legally binding—particularly those involving real estate, large sums of money, or contracts extending beyond six months—a written record is essential. Writing things down can help avoid misunderstandings by clearly defining terms and conditions.

In America today, the booming self-storage sector is a reflection of several overarching megatrends reshaping the nation's landscape. With a staggering 10% of U.S. households now utilizing self-storage solutions compared to just 5.9% in 1995, we're witnessing a 65% surge in demand. The question is, why is self-storage becoming so integral to American life?

The baby boomer generation, those born in the post-World War II era from 1946 to 1964, represents a substantial demographic turning point in U.S. history. Comprising roughly 77 million individuals, this cohort has significantly influenced supply and demand trends throughout its lifecycle. Now, as they transition into retirement, not only are they exerting pressure on social systems like Social Security and Medicare, but they're also poised to cause a seismic shift in the self-storage industry.

The journey to purchasing a self-storage facility is complex, filled with potential pitfalls and lucrative opportunities. Through years of industry observation and firsthand experiences, it's clear that successful self-storage investments share certain fundamental characteristics. As we venture into 2024, understanding these traits is more crucial than ever, especially in a landscape where outdated advice persists.

In the ever-evolving landscape of commercial real estate, self-storage facilities stand out as a beacon of opportunity, offering compelling returns through strategic leverage. The art of financing these ventures has evolved, blending traditional methods with innovative approaches to unlock greater yields and broaden investment horizons. Here's a comprehensive guide to the myriad of financing options available to investors in today's market, ensuring that every investor, from the novice to the seasoned, can navigate the financial pathways to successful self-storage ownership.

In the evolving landscape of the self-storage industry, a notable trend is the emergence of previously foreclosed facilities from the shadows of bank portfolios. These properties, perhaps ambitively launched and now struggling, beg the question: Are they wise investments?

Investing in non-performing notes (NPNs) for self-storage properties can be a complex endeavor, particularly when a property is struggling to meet its mortgage obligations. This strategy offers an alternative path for investors, but it comes with its own set of challenges and considerations. Here’s an updated guide to help you navigate these waters without falling prey to common pitfalls.

The self-storage industry has been on a steady growth trajectory for several years, with the Self Storage Association reporting that the U.S. self-storage industry generated over $39 billion in annual revenue in 2020. For investors and operators, this presents a golden opportunity to acquire undervalued assets that can offer significant returns. But how do you spot these hidden gems?

The self-storage industry, once viewed as a traditional sector, has been undergoing a significant transformation in recent years. This metamorphosis is largely driven by technological advancements. From Artificial Intelligence (AI) to the Internet of Things (IoT), modern technology is reshaping the way self-storage facilities operate, offering enhanced user experiences and promising greater returns on investment.

In the ever-evolving landscape of investments, certain sectors have consistently demonstrated their ability to weather economic storms. One such sector is the self-storage industry. With its unique business model and inherent demand drivers, self-storage has proven to be a resilient investment choice, especially during economic downturns. Let's delve deeper into the stability and growth potential of self-storage during recessions.

The self-storage industry has emerged as a lucrative sector for investors, offering consistent returns and resilience against economic downturns. However, the success of a self-storage investment is heavily influenced by the market in which the facility is located. Choosing the right market is paramount, and there are several key factors that investors should consider to ensure they're making a well-informed decision.

In the world of real estate investment, interest rates play a pivotal role in determining the attractiveness and profitability of potential deals. As interest rates rise, the cost of borrowing increases, which can lead to a decrease in property valuations.

In today's digital age, marketing for self-storage facilities has evolved beyond traditional methods. With the rise of online platforms, businesses have a plethora of tools at their disposal to attract potential customers.

Investing in a self-storage facility can be a lucrative venture, but like all real estate investments, it requires thorough due diligence. Before diving into such a commitment, it's essential to understand the various factors that can influence the success and profitability of a self-storage facility.

The rise of remote work has been one of the most transformative shifts in the modern workplace. While the trend was already gaining traction, the COVID-19 pandemic accelerated its adoption, with companies worldwide adopting flexible work-from-home policies. This shift has had a ripple effect across various sectors, including real estate. One of the beneficiaries of this trend is the self-storage industry. Let's explore how remote work is driving demand for self-storage facilities.

Inflation, the general increase in prices and fall in the purchasing value of money, has wide-ranging effects on various sectors of the economy. For investors, understanding how inflation impacts their portfolio is crucial. However, certain asset classes, like self-storage facilities, exhibit unique characteristics that not only shield them from inflation's adverse effects but also offer avenues for growth. Let's delve deeper into these dynamics.

In today's volatile investment landscape, investors are constantly looking for stable assets that offer consistent returns. Among the numerous investment options, self-storage stands out as a compelling choice. Let's delve into the reasons why.

Real estate has long been a favored investment avenue, offering stability and potential for significant returns. However, within the broad spectrum of real estate investments, there are distinct categories, each with its own set of advantages and challenges. Two prominent categories are alternative commercial real estate (self-storage facilities, mobile home parks) and traditional real estate, such as single-family homes and offices or malls.

Let's uncover the reasons why self-storage is the real estate sector's best-kept secret.

In today's competitive business landscape, customer service is not just a department; it's an ethos. For industries like self-storage, where the product is often perceived as a commodity, service can be the differentiating factor that drives customer loyalty and, by extension, profitability. In this article, we'll explore the direct correlation between top-notch customer service, customer loyalty, and increased profitability in the self-storage sector.

Few asset classes have consistently demonstrated resilience during economic downturns as self-storage facilities have.

When it comes to the prosperity of a self-storage facility, no team member holds as much sway as a proficient manager. Unfortunately, some facility owners overlook the significance of not just having a good manager but also retaining them long-term.

Before investing in a self-storage facility it's crucial to do your homework and carry out a comprehensive due diligence process before finalizing the purchase of the asset.

Like any investment, it's essential to understand the key performance indicators (KPIs) for self-storage to maximize returns and manage risks effectively. This article will delve into some critical KPIs for self-storage investments, such as occupancy rates, net move-in rates, rental income, expenses, and more. Occupancy Rate

In an unpredictable economic climate, savvy investors seek out opportunities that can weather financial storms. Here's why self-storage is a resilient and rewarding investment during economic uncertainty, covering the '4 Ds' of self-storage, the recent trends in remote work, and the sector's historical performance in bear markets.

Self-storage investments have become increasingly popular in recent years, offering attractive returns and stable cash flows. This blog post will discuss why investing in self-storage facilities can be a lucrative opportunity for investors, focusing on the growing demand, excellent tax benefits, impressive performance history, high-yield potential, recession resilience, and low overhead costs.

Owning a self-storage facility can be a lucrative investment, but to maximize its potential, it's crucial to find ways to increase its value. In this blog post, we will discuss various strategies to achieve this, including revenue management, improving the appearance of the asset, marketing, cost reduction, utilizing technology, and expanding the asset.

As a savvy investor, you're always on the lookout for profitable opportunities. One such opportunity that has been gaining traction in recent years is investing in self-storage facilities. With more and more people needing extra storage space, this industry has become an attractive option for those seeking solid returns.

Entering into a self-storage contract typically relies on information provided by the seller. However, discovering undisclosed problems during due diligence can necessitate contract renegotiation. This article outlines a strategic approach to successfully renegotiate a self-storage facility contract, ensuring a mutually beneficial outcome.

When buying a self-storage property, you always want to get the best deal you can. And a big part of that is how low a price the seller will accept. Are there any signs of what direction that will go? How can you guess how low a seller will go?

The CEO of Brooks Brothers – the renowned American clothier that has been a mainstay of men’s fashion for over a century – once said “we’re not good because we’re old, we’re old because we’re good”. That’s an interesting take on the relation between age and success. What’s the meaning of this quote and how does it relate to self-storage investing?

The U.S. self-storage industry has been around for half a century, but it has probably not seen as much structural change in all those decades as it has since 2020. The Covid era ushered in some megatrends that have rendered good storage facilities bad and hot markets cold. Yet there is opportunity amongst the turmoil if you position yourself correctly.

We all heard about self-storage buyers who would buy properties in major markets at low cap rates in recent years – often at cap rates just slightly above interest rates. 4% was a common theme, and that was based on a 3.75% mortgage. But those same buyers are in big trouble right now, and will likely either lose their properties in the years ahead or never hit any type of meaningful return on investment.

Many buyers think of a self-storage facility investment as being something in the millions of dollars. In the heart of the city that’s typically true. But if you look at storage properties in suburban and exurban markets you’ll find that storage facilities come in all types of shapes, sizes and price points. And that means that adding a storage property to your portfolio is attainable. So would that be a good decision for you? Here are some things to think about.

When you are looking for a self-storage facility manager, you often surmise that the best course of action is simply to steal the manager from the competitor down the street. It seems like a smart plan – you already can see what you get based on that property’s performance, right? The truth is that hiring the manager from down the street is not always the best plan.

Webster’s Dictionary defines “bollards” as “any of a series of short posts set at intervals to delimit an area (such as a traffic island) or to exclude vehicles” but self-storage owners define them as a way to save thousands of dollars on building repairs on a regular basis. Indeed, installing bollards in your self-storage facility may be the best idea you have this year.

When looking for a self-storage facility manager, one thought many owners have is to simply steal one from the storage property down the street. While there’s no question that this candidate may know the storage business and be available for a certain price, this strategy does not always result in the intended consequences. Here are the reasons that “hiring away” a competing storage manager rarely works.

America is rapidly changing as consumers embrace new lifestyles and discard those that no longer interest them. Meanwhile the U.S. economy has become ever more unstable and unpredictable, and the result are more severe cycles than ever experienced in the past. So how does self-storage investing fit into this rapidly changing America? Year agoa the term “megatrend” was coined to mean giant shifts in consumer behavior that can impact all America life. Here are the megatrends and the anticipated results:

There is a general misconception that larger players dominate self-storage acquisitions and make it hard for smaller buyers to compete. While it is true that large players like Public Storage do own the largest facilities due to high cost and difficulty in obtaining debt for those properties, the truth is that smaller players definitely have the upper hand in the majority of storage purchases. Why is that?

The second largest capital investment of any self-storage facility – after the building – are the roads and parking areas. These are an essential part of everything from access to aesthetics, and the lenders are phobic about their type and condition. They are expensive to install and to maintain. So the bottom line is that it’s important to understand what the options are for roads and repair and how those choices will impact your investment returns.

There are a finite number of good storage deals to buy in any given market in the U.S. And because of this restricted supply, many markets can appear “stale” after your initial efforts, as you have no control over what’s available and may have to wait for a mom and pop seller to make the decision to move forward. Since the more deals you look at, the better your odds of success, what do you do when you can’t find any good storage targets to buy in your market?

Everything runs in cycles, and you’re seeing that first-hand with the U.S. stock market which has begun its predictable descent. The market had a great run but it’s clearly over. If you are getting disgruntled or have lost confidence with stocks, then you might consider another investment option: income properties. And if a self-storage facility is in your list of income property resources, then here’s a comparison between storage investing and stock investing going forward.

There are many predictions for the stock market in 2022, and few of them are good. Meanwhile, the arrival of “stagflation” is going to usher in a stronger market for real estate in general and self-storage in particular. If you’ve been parking your money in traditional investments, maybe 2022 is the year to start exploring self-storage investing.

Wayne Gretzky once said “you miss 100% of the shots you don’t take” and that’s also true for self-storage investors.

In 1928, right before the Great Depression a year later, there was a national meeting of business leaders to go over how great things were going and what their predictions for the future were.

People keep money in gold, silver, stocks, bonds, CDs and many other alternatives. But one that many people do not think about are self-storage facilities – and yet these may be an excellent way to store your wealth in an unstable America.

The self-storage industry is going through some seismic shifts due to the new America, and one of these is described in this recent article about Global Self-Storage (GSS) and interview with their CEO, Mark Winmill https://www.wealthmanagement.com/investment-strategies/global-self-storage-ceo-points-smaller-markets-sector-s-future . Here’s what was said in the interview

This is no time to deal with financial insecurity. It’s hard to be happy when you’re life is filled with stress. Even if you have a successful career and money in the bank, all Americans are within financial harm’s way 24/7 due to an unstable world and financial markets that are at unsustainable all-time highs. So how can you improve your financial sanity with a self-storage facility?

Have you ever talked to someone who is bragging about all the money they’ve made in self-storage investing, and then you come to find out that the story is from the 1980s? Indeed, it would seem that most of the self-storage success stories out there are from an era roughly 30 to 40 years ago. And that’s a problem if you are looking to these stories to help you make money in today’s world.

Every self-storage facility purchase requires a title company to handle the transaction – but which one should it be? The answer is that you should always steer for the largest title company in the metro area in which the property is located. There are several good reasons for this.

To build a self-storage facility typically requires going before Planning and Zoning as well as the City Council. Sometimes it’s just to approve your plans, but in other cases it’s required to get the zoning necessary to have the right to build this usage category. While there are professionals who offer their services in this regard, they are expensive and may not fit your budget. So here’s how you can attack these situations like a professional.

Self-storage serves many roles for many customers. And, assuming that these customers all come from similar positions to need storage, it might be a good marketing plan to work backwards and match the key drivers for demand to ways to reach these distinct groups. So what are the top reasons for storage demand and how can you market to them?

The concept of “income properties” revolves around that one sole focus: making income. There is no reason you would ever want to own a self-storage facility other than to make money. And making money is pretty simple too – you have to produce enough revenue to cover costs and your mortgage and still have cash flow to put in your pocket. Yet many of the largest self-storage companies fail miserably in this concept.

Many a self-storage deal has been saved through creative seller financing. This is the concept in which the seller offers great lending terms to the buyer that offset the other drawbacks. So how can you make a deal work with seller financing that would not work without it?

We all hate spending money, but sometimes the cost is offset by having greater confidence in your deal – all the way to the point of having the guts to pull the trigger and sign the closing documents. And the source of much of this confidence are third-party reports. While many of these are bank requirements, others are simply the smart way to proceed even with seller financing. So what are these third-party reports that are a big part of buying any self-storage facility?

All self-storage investing revolves around obtaining financing. While most people think this is their job and must do it themselves, there is another option and that’s utilizing a “capital consultant” which is also known as a “Loan broker”. And you should think about this before you start contacting lenders.

Bill Gates is best known for being the founder of Microsoft and one of the richest people in the world with a net worth of around $140 billion. But he has recently branched out into a new arena as a significant self-storage investor. He has bought a large stake in StorageMart, which is the largest privately-owned self-storage provider in the world.

Self-storage investing is not bullet proof, and there is no Kevlar vest to protect you if you do not plan accordingly. Although self-storage did well during the 2008 Great Recession – the implosion of the single-family market – it has done nearly as well in weathering the Covid pandemic which began in March of 2020. And there are already lessons to be learned.

It’s a simple fact that many self-storage managers can’t make the cut. Some people are just not manager material. And there’s no point in hiding from the fact. There’s an old saying that “it’s easier to change people than to change people” and that’s as true today as it was when that motto first was invented. So how do you get rid of the failing storage manager and make way for the new candidate?

>Every action has a corresponding reaction. When you couple this withhe mantra that “life is not fair” you end up with the net effect from a new Presidential term. Biden is about to take office and his policy comments have already sparked a reaction as to who gets hurt and who gets helped by the new administration. So how will Biden impact the self-storage industry?

Not all self-storage facilities are created equally. Well, they may be built the same, but there’s a whole lot more to a storage property being “investment grade” than just metal walls and roll-up door. And the entire self-storage “media” often point you in the wrong direction regarding what you should be buying and what you should avoid. So what makes up an “investment grade” property? Let’s explore that issue.

One of the greatest tools in self-storage investing – the most powerful of them all – is leverage. The simple existence of sensible leverage on a storage property can spike the return up significantly as well as to allow the buyer the ability to own something far beyond their typical budget. So how does leverage work as a beneficial tool to make money with a storage facility?

One aspect of self-storage facilities that gets little attention is the fact that it’s made up of tens or hundreds of little customers. This is not a source of frustration but actually an asset for those who own them. So what’s so great about having a ton of tiny customers?

Virtually all investors in the self-storage arena buy their properties using debt. That’s always been the attraction to real estate: the availability of getting leverage. And leverage is the tool that allows cash-on-cash returns to be stronger than traditional investments that have no leverage. One of the metrics banks use to underwrite loans is the “coverage ratio”.

You cannot buy a self-storage facility without engaging in the old-fashioned art of negotiation. Nobody knows when the first negotiation in the world transpired, but it probably dates back to cavemen trying to get that extra piece of firewood. You simply cannot be an effective buyer without understanding its principals and engaging in the gamesmanship that has become negotiation today. So what are the basics you need to know?

Hurricane season is always a good reminder of the importance of keeping mindful attention on the existence of flood plain when buying a self-storage property. Even in non-coastal areas, a severe weather event can lead to high levels of rain, and this can result in danger if you are in the flood plain. Sowhat do you need to know about self-storage facilities and flooding?

The life’s blood of a self-storage property’s occupancy is the calls coming in from prospective customers. All of your marketing is contingent upon what happens when the phone rings. Yet too many storage owners cede control over their important conduit to the manager, without adequate safeguards. So how can a self-storage facility owner take control over that phone line?

Like any business, self-storage owners cannot succeed without collecting their rent each month. To make this possible, smart owners build a “collections ritual” that influences the action steps they take and help shield them from liability and failure in getting the necessary funds. So what are some ideas for a successful “collections ritual”?

America changed in March of this year, when the acknowledged arrival of the Covid-19 pandemic rattled the U.S. population with self-quarantine followed by urban riots and unrest. On top of that, many of the activities that we had all learned to enjoy (dining out, movies, theater, shopping) suddenly ceased to exist in the manner they had before. This ushered in what is now known as the “Great Reshuffling” by Bestplaces.net – which refers to the population moving from urban to more suburban and rural markets.

There’s an old saying that you can’t escape from death and taxes. And one of those taxes is “property tax” which is the amount you will pay annually for your storage facility. While the concept of property tax may seem complicated, it’s pretty simple when you understand the format. So here’s a quick review of self-storage property tax from A to Z.

Traditionally, larger buyers of self-storage facilities always viewed themselves as having an edge when it came to lending and negotiating. They thought they could get lower interest rates and better terms than smaller buyers and use that as a weapon against them. However, the Covid-19 changes to the self-storage industry have rendered a new era in which the big companies have no advantage over the small.

The Covid-19 pandemic has not been kind to urban self-storage investing. In fact, it’s a downright disaster. Here’s what the New York Times had to say: What once seemed like one of the few recession-proof parts of commercial real estate looks as vulnerable as many other businesses. And then backs that up with the facts: Monthly rent for new customers before one-time discounts for a 10-by-10 unit without air-conditioning and heat, for example, declined 4.3 percent nationwide on an annualized basis, according to the research site Yardi Matrix. For the same unit with climate control, rent fell 6.7 percent. You can read the entire article here.. So what happened and are their any bright spots?

A common question for most investors is whether it’s more profitable to build a self-storage facility from scratch or to buy an existing one. There are many issues to consider on this topic, but here is a basic explanation of the good and bad aspects to both.

Some self-storage facility owners – particularly those that deal in raising capital in syndications – are trying to proclaim that the Covid-19 pandemic has created a “strong buying opportunity” in storage properties. However, this is simply not the case. Instead, Covid-19 has brought a valuable lesson learned to the storage industry as well as a prediction for the future.

So you’re looking at a self-storage property with huge vacancy – let’s say 70% of the space is unrented. That’s a huge issue on many fronts. So how can an investor make a successful transaction out of a property like that? Is it even possible?

Regardless of how much you spend in advertising, there’s no purpose to any of it unless the customer signs the rental agreement. It’s kind of like football, getting to one inch of the goal line is of no value unless you score the touch down. So what are some tips to get the customer to sign that agreement and score one more occupied unit?

Real estate is all about leverage and self-storage is no different. You need to be able to obtain a loan to by a property, and the banker is an integral team member that makes the whole deal possible. But an easy way to make an end-run around traditional banking is to have the seller carry the financing. Not only does seller financing eliminate the stress and effort to find a bank, but it also saves you money on third-party reports, interest rates, and is typically non-recourse. So how can you get it?

Covid-19 has exposed many weaknesses in certain markets that self-storage facilities serve. But much of this weakness began years earlier when investors practiced the standard behavior of moving with a “herd” mentality. Why is a “herd” mentality dangerous in self-storage investing?

There are few skills as important in buying a self-storage facility – or less understood – than the correct way to negotiate. Those who have this skill do well and those that don’t never end up with a deal at all, or they end up overpaying for the asset. So how do you become a pro at negotiating a storage property?

Self-storage has long been known for its superior collections rate formed through the ability to auction off unit contents if rent is not received. However, this process has new hurdles created by the national Covid-19 pandemic, and every storage owner needs to be aware of potential changes in policy.

When you go to college, there are certain items you must have obtained to graduate – such as successful completion of certain classes and attendance of a certain number of units. And buying a self-storage facility includes these same necessities, although in the form of third-party reports. But these reports are expensive and time-consuming to obtain. So which reports do you really need and which are optional?

You may have the seen the articles declaring that the riches person in Kentucky is Tamara Gustavson. Who is she? The daughter of B. Wayne Hughes, the founder of Public Storage, the largest owner of self-storage facilities in the world. Her 11% stake is now worth around $5.7 billion and growing. That also makes here the 144th richest person in the U.S.

If I was on a game show and I had to choose just six words that I could use to build a successful self-storage facility portfolio, here’s what I would select: “What Do I Have To Do …” So why are these six words so powerful in buying and operating storage properties? How can they give you the edge in being successful? There are many reasons.

The last time we had a major recession in the U.S. was the same year that the Toyota Corolla was the top-selling car and “Umbrella” was the top song: 2007. That was 13 years ago. Since that time, many investors became complacent and spoiled by an economy that was always going up. Then came the Covid-19 pandemic and everything changed.

Self-storage REITs (the backbone of passive investment in the storage sector) have been taking major hits recently due to faulty strategies and overzealous building. The disappointments will continue forward for the foreseeable future.

Webster’s Dictionary defines “negotiation” as “to obtain or bring about by discussion”. That’s one way to describe it, as a frank discussion between buyer and seller in which they give their opinions on value and search for an appropriate middle ground. But there is also a strategy involved by the buyer that helps to make that successful ending possible.

While most storage investors buy existing properties, there is another breed that additionally builds storage properties from scratch. This type of approach requires a specialty type of financing and then transferring this debt to permanent status. So how do you bridge the gap between construction and final financing?

Many people would have you believe that population alone is the determining factor in self-storage success. They claim that the only markets worth investing in are those that are large and growing daily. But the truth is that this is far from the key factor to success. In fact, many of these “hot” markets are lacking in a more important trait: profitability. But why?

There are roughly 5,300 colleges and universities in the U.S., and they’re spread out over all 50 states. There is a huge following with these establishments of higher learning for football and other sports, but there’s also a following among smart storage owners. College towns have always been good locations for self-storage facilities. But why is that?

Sometimes a photo can tall a thousand words. But sometimes none of those words are what you really want to say. That’s why developers have long used renderings when presenting ideas to city government and the public. But why not simply use photo mock-ups?

What is a self-storage manager? Well, more than just someone who exchanges a lease for a check. In fact, your manager is your ambassador, mayor, chief marketing officer all rolled into one. So how can you help to make your storage manager more effective in your duties?

We’re all big kids – we love to see roadside attractions. Perhaps it’s because it breaks the monotony of the American road, or maybe it’s because we enjoy the humor and splendor of these unique creations. But would it be a good idea to add some unusual sparkle to your self-storage facility?

Your roll-up door broke off. The electric is flickering in a unit. There’s a roof leak. All of these events require hiring a contractor to make the needed repairs. But how do you do that? Here’s how to properly engage a contractor in a storage facility.

When you look at most listings for storage facilities, you will note that a common term used to describe them is their “cap rate”. So what is a “cap rate” and how do you know when it’s too high or too low?

Nothing can make or break your deal more than improper negotiation. You can do the greatest analysis and have terrific operational skills but you’ll never own a storage property if you can’t agree to a price the seller will sign the contract at. So what are the main skill sets required to be a great negotiator?

With the New Year upon us, there’s little time to waste if your goal is to acquire a self-storage facility in 2020. But it’s one thing to talk about it, and another to actual do it. When approaching something as significant as buying a storage property, there’s an established play book that has very concrete, step-by-step directions, if you will simply follow what others have learned over the years. So what are the steps?

One thing is for sure about self-storage facilities: they are extremely stable investments. They have very consistent revenues and very high levels of success. But why is that?

Most Americans are conditioned to believe that the prettier the real estate asset, the more money it generates. This is normally true, in asset classes ranging from apartments to hotels to retail centers. However, it’s not always the case in the self-storage sector – and that’s a good thing for many investors. So why do ugly self-storage facilities often outperform that pretty ones?

The U.S. economy is in anarchy. The stock market is plunging, oil is collapsing, and world markets are in jeopardy. So where can you invest in a troubled world? The answer is self-storage. It’s one of the few niches that actually performs as well in times of turmoil as it does in times of economic vibrancy.

There is a ton of bad information out there on the self-storage or mini-storage industry. Contrary to what you may read, there is virtually no money in building new facilities or buying them at a 7% cap rate. If you really want to make money in self-storage, you have to put in significantly more work, and follow a different game plan entirely. Buying an established facility with good occupancy at market rents will not lead to great riches ' only endless concern over making the note payment. The way to success is much more basic.

Buying a self-storage facility is a lot harder than you think - particularly if you want to make money with it. Over the years, there are some basic traits that separate winning facilities from losers. And that genetic code is hard to break. There are many people who will tell you all about how to buy a self-storage facility, in order to sell you a book, course or boot camp. But they really have either limited or no experience. The concepts we're going to tell you here are based on real-life information (and plenty of it) from operating one of the largest websites devoted to the industry. And it may be a lot different from what you've heard before.

There is urban legend going around, created by some "gurus" trying to sell their books, that you can manage an entire self-storage facility from a "kiosk", basically a walk-up automated teller like an ATM machine. Although the concept of having a "robot" manage a self-storage facility is attractive from a cost-savings and low management perspective, it is, unfortunately, a fantasy with about as much practicality as the photon torpedo out of Star Trek.