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Dispelling Common Misconceptions about Buying a Self-Storage Facility
August 4, 2023 at 4:00 AM
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Are you an investor considering purchasing a self-storage facility as a potential investment opportunity? Or maybe you’re thinking of just starting your investment journey. Regardless of your situation, self-storage has been a growing industry in the U.S. for decades and shows no signs of slowing down anytime soon.

However, there are common misconceptions out there, so it’s important to know what you’re getting into before investing in self-storage real estate and starting a business. This article will dispel four common misconceptions about buying a self-storage facility.

1. Investing in a self-storage facility is easy.

There is a common misconception that owning and running a self-storage facility is effortless and runs with little supervision. While this may be true for some experienced business owners, it isn’t entirely accurate because several operational responsibilities must be undertaken, including:

  • Keeping up to date on competitor rates
  • Maintaining the facility and the surrounding land
  • Adhering to legal requirements
  • Keeping financial records

2. The more extensive the storage unit, the more profit.

It’s natural to assume that larger units bring in more money. But self-storage isn’t like traditional real estate, where size is correlated to profits.

Cash flow, operating revenues, and other financial aspects are far more vital in calculating the value of a self-storage facility. And they should be considered heavily whenever you want to make an investment, whether in self-storage or not.

In addition to finances, occupancy rates are also essential. If you have a facility with little to no occupancy, it’s a risky investment unless clear reasons can be established and fixed.

3. Location doesn’t matter to potential clients.

While investing in a self-storage facility is a great idea, you are probably not the only one considering buying one. They are becoming increasingly popular and more common to see. This can lead one to believe that you can place a facility anywhere, and it will make money.

But this is just another common misconception about self-storage. A few things you want to consider before you invest, including the following:

  • Visibility and accessibility. A self-storage facility that can be seen and easily accessed is more likely to perform well than one that is off the beaten path and secluded.
  • Proximity. A self-storage facility placed in an area with high unemployment and a poorer residential area will underperform. Be sure to research the locations that make the most sense in your city.

4. Self-storage is a cheap investment.

As with any investment, you can’t cut costs when it comes to the quality and security that your clients are looking for. The expectation is higher for self-storage because people leave their valuables and goods and trust you to keep them safe in exchange for payment.

Want to learn more about buying a self-storage facility?

Then reach out to our team at American Real Estate Associates, Inc. Since 2003, we have become one of Washington’s leading commercial real estate transaction firms. Our areas of expertise span from commercial investments to self-storage facilities to land development. In regards to self-storage, we specialize in self-storage and investment properties for sale, offering excellent opportunities suitable for all budgets. Our team has helped buyers and sellers with self-storage transactions, closing over $450 million in self-storage real estate throughout the Northwest.

Our team of professionals is dedicated to helping you find the best deal for self-storage. We also provide expert advice in real estate dealings so you can confidently move forward. Speak with our team today to learn more about what listings are available.