How to Buy a Self Storage Facility: The Complete Investor’s Guide

Self-storage is the unsung hero of the real estate world. Think about it: we live in an age where people have more stuff than closets, and businesses can’t seem to throw away a single box of old files. Enter self-storage — recession-resistant, cash-flow friendly, and scalable. It’s like the subscription business model before Netflix made it cool.

But buying a self-storage facility isn’t as simple as finding a dusty warehouse, slapping some locks on the doors, and waiting for the checks to roll in. Done right, it can be one of the best investments you make. Done wrong, it can turn into a very expensive game of Tetris. Let’s walk through the steps of making a smart acquisition.

WHY Self Storage is a Strong Investment

• Resilient, recession-resistant demand – People need storage whether times are good or bad.

• Multiple revenue streams – Beyond unit rentals, facilities make money from late fees, tenant insurance, locks, and even truck rentals.

• Scalable growth – You can expand a facility, add climate-controlled units, or implement better management for instant upside.

Understanding the Self Storage Business Model

At its core, self storage is about one thing: renting space to people who don’t have enough of it.

Types of facilities:

• Traditional drive-up units (simple, low maintenance)

• Climate-controlled facilities (higher rent, but your HVAC repair guy will know you by first name)

• Multi-story urban buildings (great for dense areas, but you’ll need a good elevator and even better patience)

Operations come down to three words: occupancy, efficiency, and security. Keep the units full, the systems tight, and the tenants feeling safe.

Setting Your Investment Criteria

Before you start shopping:

1. Location – Population density, local growth, and traffic counts. If people can’t see it, they won’t rent it.

2. Facility Size – Are you dipping your toe in with 150 units or diving in with 800?

3. Occupancy – 80–90% is healthy. Too low = bad management. Too high = underpriced rents.

4. Capital Requirements – Know your budget before you start calling brokers.

Finding Storage Facilities for Sale

Opportunities come in different flavors:

• Broker listings – Polished, but competitive.

• Direct owner outreach – Many owners are mom-and-pop operators ready to retire.

• Auctions – For those who like their investments with a side of adrenaline.

• Networking – Industry groups and trade shows are great places to sniff out deals.

And my personal favorite site for browsing available properties? CREXi.com. It’s an excellent marketplace for commercial real estate, including self storage.

Pro tip: Off-market deals are often cheaper, but require hustle.

Conducting Storage Facility Due Diligence

This is where you trade in your investor cap for a detective hat. As Toy Storage Nation points out, due diligence is everything. Focus on these seven areas:

1. Market Analysis – Demand, competition, and future supply.

2. Zoning and Permits – Make sure the property is legal (yes, people have bought facilities that weren’t).

3. Physical Condition – Roofs, doors, pavement, security, drainage.

4. Financial Review – Verify rent rolls, occupancy, and financials. Watch for delinquency.

5. Operational Systems – Is management run on modern software or sticky notes?

6. Environmental Issues – Flood zones, buried tanks, or hazardous waste can ruin your day.

7. Legal/Ownership Review – Confirm ownership, liens, easements, and litigation.

Due diligence may not be glamorous, but it’s the difference between buying a cash cow and buying a cow that just eats your money.

Calculating Net Operating Income (NOI)

Before you can value a storage facility, you need to calculate its Net Operating Income (NOI). This number tells you how much money the property generates before financing, and it’s the foundation for determining value.

Formula:

NOI=GrossRevenue–OperatingExpensesNOI = Gross Revenue – Operating ExpensesNOI=GrossRevenue–OperatingExpenses

Step 1: Gross Revenue

Include all income sources:

• Unit rentals

• Late fees and admin fees

• Tenant insurance commissions

• Retail sales (locks, boxes, packing supplies)

• Ancillary income (truck rentals, parking, etc.)

Step 2: Operating Expenses

Subtract costs to run the property (but not mortgage payments or income taxes):

• Payroll or management fees

• Utilities

• Maintenance and repairs

• Property taxes and insurance

• Marketing and software costs

• Security and monitoring

Step 3: Do the Math

Example:

• Gross Revenue = $600,000

• Operating Expenses = $350,000

• NOI = $250,000

Pro tip: Always request a trailing 12-month (T-12) income and expense statement. It’s a better indicator than just looking at last year’s tax return.

How to Value a Storage Facility

With NOI in hand, you can estimate value using the income approach:

• Divide NOI by a capitalization rate (cap rate) that reflects the market.

Example: $250,000 NOI ÷ 7% cap rate = ~$3.57 million.

Other considerations:

• Replacement cost

• Comparable sales

• Upside potential (rent increases, expansion, improved management)

Financing a Storage Facility Purchase

Options include:

• SBA 7(a) or 504 loans – Great for first-time buyers.

• Conventional bank loans – For stabilized facilities with strong cash flow.

• Seller financing – Common with mom-and-pop sellers.

• Private investors or syndication – For buyers who want to go bigger with outside capital.

To make this easier, in The Buyer’s EDGE Club we’ve built a tool that does the heavy lifting for you. With just a few inputs, it calculates:

• Cost per unit

• Cap Rate

• How much a bank is likely to lend you

• Cash flow projections

• And more

Here is an example of this tool so you can see it in action.

Want access to the full tool? Join The Buyer’s EDGE Club and get immediate access to our self storage analyzer plus other acquisition resources.

Negotiating and Closing the Deal

Typical steps:

1. Letter of Intent (LOI) – A non-binding roadmap that outlines price and key terms.

2. Offer to Purchase (Purchase Agreement) – A binding agreement that formalizes the deal structure, contingencies, and timeline.

3. Due Diligence – You dig, they sweat. This is where you confirm the numbers and uncover any issues.

4. Financing – Secure the loan and finalize capital sources.

5. Closing – Paperwork, signatures, and (hopefully) champagne.

Transitioning to Ownership and Management

Congrats, you own a storage facility! Now the real work begins:

• Tenant Onboarding – Set clear policies and payments.

• Technology – Online rentals, kiosks, and auto-pay reduce headaches.

• Revenue Management – Small, steady rent increases work best.

• Staffing – On-site manager or remote management? Decide early.

Risks of Buying a Self Storage Facility

Even self storage has risks:

• Market saturation – Too many facilities, not enough tenants.

• Rising interest rates – Higher debt costs = lower returns.

• Poor management – Bad systems destroy NOI.

• Institutional competition – REITs with deep pockets love this space.

Growing Value and Planning Your Exit

Ways to maximize returns:

• Expand with new units or climate-controlled spaces.

• Improve security and branding to justify higher rents.

• Refinance once NOI grows.

• Sell to institutional buyers once stabilized.

• Use a 1031 exchange to roll gains into another property tax-deferred.

Frequently Asked Questions About Buying a Self Storage Facility

Q: Is self storage a good investment in 2025?
A: Yes. Self storage is recession-resistant and continues to perform well even during downturns. Rising population density, downsizing, and business needs drive demand.

Q: What is the average ROI on a storage facility?
A: Many facilities deliver 7–12% annual ROI when well-managed. Facilities with room for occupancy growth or expansion can deliver even higher returns.

Q: How much does it cost to buy a self-storage facility?
A: Smaller facilities can sell for under $1 million, while large metro facilities often go for $5 million+. Prices depend on income and cap rates.

Q: Can I use SBA financing to buy a storage facility?
A: Yes. The SBA 7(a) and 504 loan programs are popular for storage acquisitions thanks to low down payments and long terms.

Q: Do I need experience to buy a self-storage business?
A: Not necessarily. Many first-time buyers succeed. Lenders prefer business experience, but strong software, management, or third-party operators can bridge the gap.

Q: What is the biggest risk of investing in self-storage?
A: Risks include market saturation, rising interest rates, and poor management. Thorough due diligence and strong operations mitigate these risks.

Ready to Buy a Self-Storage Facility?

At EDGE Business Advisors, we specialize in helping buyers like you navigate acquisitions with confidence. From evaluating opportunities to negotiating and closing, we guide you every step of the way.

Schedule your free Acquisition Power Hour today — let’s build your buyer roadmap and identify the right storage facility for your goals.