Are you Making your Self-Storage Investment Riskier than Necessary?
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by admin
- August 19, 2014
- Market Monitor, What We're Reading
- 0
As an active self-storage broker, I prepare dozens of broker price opinions every year. Naturally, the property owner wants to know their property’s value in the current market, but the answer to that question is as individual as each property and can be affected by some very common operational methods employed by self-storage owners. When contemplating a purchase, most of the risk in a Buyer’s eyes can be summed up in the following question. “Will this property continue to perform as the Seller has described?” Most investors agree that operational history is the most reliable indicator of future performance, so how can you demonstrate this history to prospective buyers and make your investment seem like a less risky investment?
From a financial perspective, the performance of a self storage property is directly related to the income, expenses and to some extent, the occupancy. These three metrics are demonstrated to prospective buyers through the accounting and management records kept by seller. In self storage today, I see four broad categories in both management and accounting methods.
