Post Edited (04-14-11 21:48)
Dale,
I would evaluate self storage properties base upon cap rate versus price per square foot. Price per square foot will be very high in places like California and very low in South Dakota. I would ensure that the income and expenses are accurate. Brokers/owners like to “play” with the numbers. Steve and I buy at 9-10+ cap rates on actuals.
I would buy an existing facility. To build a self storage facility you could go broke in the process if you don’t have deep pockets. The holding time, construction costs, and lease up could very costly and a very painful process in terms of time. I just added two new buildings to a self storage facility that I have and it took almost 2 years to get site approval. Hopefully I will have it built within the next 4 months (fingers crossed!).
If you are serious about getting into Self Storage I would look at the Self Storage Bootcamp.
Corey