What Makes a Self-Storage Facility Attractive to Buyers?

There are many things that draw investors into the idea of investing in self-storage facilities. This investment strategy involves low overhead costs, high-income potential, and little experience in the field to get started. But not all self-storage facilities are created equal, and serious buyers are looking for a few key qualities to help them choose the right space for their investment.

The Physical Features

One of the first things buyers look for in a profitable self-storage unit is the physical characteristics:

• How big is it?
• How many units does it have?
• How easy is it to get from one area to the next?
• Is there space for a leasing office?
• Are roads/driveways in good condition?

Buyers also pay attention to the amount of work a facility needs to be operational. Units in good condition, functioning lights and electrical systems, and a security system in place reduce preparation time and help maximize ROI faster.

The Location

The location of a self-storage facility plays a major role in its attractiveness. Buyers look for facilities in areas with high demand and low supply, near major highways, in safe neighborhoods, and centrally located for convenience.

• High-traffic areas increase visibility and marketing opportunities
• Traffic must match the target demographic; areas where residents have disposable income are ideal
• Accessibility from nearby cities and towns is essential

Operational Performance

A facility may look great and be in a prime location, but past performance is critical. Serious buyers investigate:

• Revenue trends and profitability
• Consistency of expenses
• Historical ROI

Key statistics buyers consider:

• Revenue: ~$1 per square foot of storage space
• Expenses: $2.50–$3.75 per square foot for mid-size units
• Average ROI: 17.43% annually
• Units per facility: ~540
• 9.3% of U.S. households rent storage
• Average tenant turnover: 7–8% per month

Properties that meet these benchmarks are more attractive to investors.

Competition

Buyers look for areas where they can dominate the market. Facilities in highly competitive markets are less appealing, while those in underserved areas with strong demand are more attractive.

The Next Step

Self-storage facilities have proven to be a stable investment strategy with low overhead and high-income potential. Even investors with little experience can succeed if they focus on:

• Physical features
• Location
• Operational performance
• Competition

To learn more, sign up for our newsletter, search for self-storage facilities in your market, or read other articles about this type of investing.