Self-storage properties can be excellent investments. If you purchase an underperforming self-storage property, the initial cost is less expensive than if you buy one that is thriving financially. The secret to turning things around and having assurance of making a hefty profit is do the right kind of homework in advance. Certain conditions that exist at an underperforming self-storage property are signals that it is an excellent investment.

Additional Income

There are great add-on profit centers that can supplement income for the owner of a self-storage facility. You have a better opportunity to improve the performance of a self-storage property if the current owner is not already providing tenant insurance, truck rental, or retail sales. If these ancillary sources of income were already in place, the property probably wouldn’t be such a bargain.

 

Internet Marketing

A modern website that is kept up to date is an essential marketing tool. If an underperforming self-storage property doesn’t have a viable web presence, the potential to improve profits is significant. Money that hasn’t been spent on building a presence on the Internet, has likely been spent in an area much less likely to improve the property’s bottom line.

 

Update the Facility

If the property appears to be outdated, a minimal upgrade could do the business a world of good. It doesn’t cost a lot to perform a few simple repairs, such as new paint, upgraded security, or roof repair. Even adding a new roof may be a very good investment that’s worth the cost. All of these measures will help to attract more business and increase the net operating income (NOI).

 

Low Occupancy

The revenue of a self-storage property isn’t maximized if there is a low occupancy rate. The above-mentioned strategies will all help to lower the vacancy rate and raise the NOI.

 

Examine Financials

The reason that a self-storage property underperforms is often that the current business owner spends the money in ways other than where spending will yield a return. For instance, the owner may neglect the collection of fees or offer unnecessary discounts or perks. Expenses can often be re-categorized to ensure an improved return on investment.

 

Help Along the Way

The Weaver Realty Group is an Argus Self-Storage Network Affiliate, serving the entire Florida except the panhandle. This partnership has given Weaver the benefit of a nationwide network since 1999. Contact Josh Koerner of Weaver Realty Group at 904-591-0140, if you want the benefits of a hands-on self-storage broker as you seek to buy an underperforming self-storage facility and ultimately enjoy healthy profits.