I’m looking at a park where the seller also has storage units and he is selling them as a package. The storage units are on their own parcel of land, separate, but near the park. I have no experience with valuing the income for the storage units. What is a typical expense ratio, etc?
Thanks for help with this!
Anyone? Surely someone has valued self-storage buildings…
One thought would be to calculate a separate cap rate for just the storage unit business and see if it helps or hinders the profitability of the deal. Of course if the Seller’s records don’t distinguish between the two separate businesses you’ll have to determine expenses on your own… of course that is what you are asking for and I’ve been no help so far. I was looking at some storage unit businesses a while back, but I don’t remember what the industry “average” expense ratio is. But you can Google and find similar forums and info for that industry in the same way this forum is full of great info for parks. If there are lots of empty storage units, or if you expand that business, look into a program UHaul has whereby their reservation system helps fill your units with people who call them and need storage You don’t need to be part of their truck rental thing either.
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These guys know a thing or two. http://www.selfstoragesuniversity.com/
If there are a lot of vacant units confirm, the market has the potential to fill them, otherwise put together a plan to value it accordingly and sell it.
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Thanks jhutson, I will check this out!