Most real estate buyers have an endless attraction to what are called “hot markets”. But this pursuit has some disastrous results for most self-storage buyers. In this Self-Storage University podcast we’re going to explore the truth about “hot markets” and how to approach them properly.

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.