Thinking about buying a self-storage facility, but aren’t sure if the investment makes sense? The Storage Facility Deal Calculator helps investors analyze potential self-storage facility investments by calculating key financial metrics including cash flow, cap rate, and unit-level profitability.
Storage Facility Investment Calculator
Analyze self-storage facility investments
Basic Information
Unit Configurations
How to use this calculator
Enter property details to the best of your knowledge:
- Facility Name: Name or identifier for the property.
- Asking Price: Total purchase price of the facility.
- Money Down: Your planned down payment amount in dollars.
- Loan Amount: Total amount to be financed (Asking Price – Money Down).
- Interest Rate: Annual interest rate for the loan (expressed as a percentage).
- Square Footage: Total facility square footage according to the listing.
- Vacancy Rate: Expected vacancy rate (industry standard is between 8% – 10% based on data from Statista).
- Monthly Expenses: Operating expenses excluding loan payments. This will could include things like: Property Taxes, Insurance, Utilities, Staffing / Payroll, Repairs and Maintenance, Marketing and Advertising, Security Costs, Administrative and Office Expenses, and other miscellaneous items.
Outside the Storage Hutch.
Storage Unit Configurations
For each storage unit type in a prospective storage center, enter the following:
- Width: Unit width in feet.
- Depth: Unit depth in feet.
- Number of Units: Quantity of this unit type.
- Rent per Unit: Monthly rental rate for this unit type.
Use the “+” button to add more unit types or “-” to remove them.
Standard self-storage unit sizes typically include: 5×5 (25 sq ft) – Small closet size, 5×10 (50 sq ft) – Walk-in closet size, 10×10 (100 sq ft) – Half of a standard one-car garage, 10×15 (150 sq ft) – Two-thirds of a one-car garage, 10×20 (200 sq ft) – Standard one-car garage size, 10×25 (250 sq ft) – Larger garage or small vehicle storage, 10×30 (300 sq ft) – Standard two-car garage size, 15×20 (300 sq ft) – Large storage for multiple vehicles or RVs.
Unit sizes can vary slightly based on the facility and location.
These are the exact questions we ask owners on the phone when we cold call facilities to purchase.
— Kevin Bell 🍩 (@kevinasrx) August 31, 2024
Feel free to steal it and use it as your own.
We then plug the numbers in right then and there on the phone and give them a range.
Based on how they react to the range is how… pic.twitter.com/QhtJVmVH3v
Key calculations explained
1. Loan Payment Calculation
The calculator uses the standard amortization formula for a 30-year loan:
Monthly Payment = L × (r(1 + r)^n) ÷ ((1 + r)^n – 1)
Key: L = Loan Amount | r = Monthly Interest Rate | (Annual Rate ÷ 12) | n = Total Number of Payments (360 for 30-year loan)
Vacancy Impact
The calculator adjusts gross income based on expected vacancy: Effective Gross Income = Potential Gross Income × (1 – Vacancy Rate)
Pro Tip: Keep vacancy rates low to maximize revenue.
3. Unit-Level Analysis
For each unit type, the calculator provides:
- Total Rent: Number of units × Rent per unit
- Rent per Sq.Ft: Rent per unit ÷ (Width × Depth)
- Monthly Rent: Total monthly revenue for this unit type
4. Break-Even Analysis
The calculator determines required monthly revenue to cover all expenses and required occupancy rate to break even.
Formula:
Break-Even Occupancy = (Monthly Overhead ÷ Potential Gross Income) × 100Real-world insights from Kevin
When using the deal evaluator, there are a few real-world considerations that can make evaluating deals more nuanced. Kevin Bell, an experienced storage unit owner, shares some of his insights to keep in mind:
1. Missing Unit Mix Data
Especially with off-market deals, you might not have a detailed unit mix breakdown. Often, the owner will just provide a total monthly or annual revenue figure. For on-market deals, you can usually get the full unit mix, but off-market ones might be less specific. Remember to be a little bit flexible with people or you might pass on a great deal.
2. Quick Expense Estimates
When working on the fly, expenses are often estimated using a standard percentage. Kevin typically uses an expense ratio between 35-40% for quick evaluations. This rough estimate helps when you need to do the math quickly without every expense line item. Including this shortcut in the calculator helps streamline the evaluation process, especially when speed is key.
About this Calculator
Meet Kevin Bell.
Thing to think about before investing in a self storage.
When you’re considering a self-storage investment, the real opportunity often lies in finding a property with untapped potential. I had a great conversation with Kevin Ball, who shared some of his go-to strategies for turning an underperforming facility into a profitable venture. Kevin’s approach is refreshingly practical: he’s all about making smart, simple changes that deliver a big impact without overcomplicating things.
The Storage Hutch allows customers to book and pay for a unit online.
Start With the Basics
Kevin always advises looking for what he calls “the low-hanging fruit” first. In his words: “If a facility isn’t full, don’t overthink it—look at the basics. Are they even listed on Google? Can customers book online? Fixing these small issues can make a big difference, often without much cost.” It’s surprising how many facilities lack basic online visibility or a simple way for customers to book a unit. These quick wins can help fill up vacant units faster and boost occupancy rates.
Pricing and Expansion
Another area Kevin likes to evaluate is the current rental rates. Are they in line with the local market? Many owners set their prices and forget about them, missing out on easy revenue gains. Kevin’s tip: “Don’t be afraid to raise rates, but do it gradually. Even a small increase spread across all units can make a noticeable impact on your bottom line without scaring off tenants.” If the facility has room for expansion, adding a few more units or even specialty options like climate-controlled storage can generate additional income.
Automate and Optimize
Kevin believes strongly in running an efficient operation, especially if you’re managing multiple investments or balancing a full-time job. He’s a big advocate for automation, from online payments to digital access controls. This not only reduces staffing needs but also improves the customer experience. According to Kevin, “If you don’t automate, you’re just adding more work for yourself. Free up your time to focus on scaling, not handling day-to-day headaches.”
Think About the Downside
Kevin is also careful to assess the risks before getting too excited about the upside potential. He looks at what could go wrong—market downturns, increasing competition, or unexpected repairs. His advice: don’t just plan for the best-case scenario; make sure you’re prepared for the worst as well. It’s this level of due diligence that sets a solid foundation for any investment decision.
Playing the Long Game
At the end of the day, Kevin isn’t looking for a quick flip. He’s focused on steady, incremental improvements that add up over time. It’s about consistent management and making smart choices that increase the value of the facility year after year.
So if you’re eyeing a self-storage deal, take a page out of Kevin’s playbook. Look for simple ways to boost occupancy, optimize pricing, and automate operations. And remember, this calculator is only the starting point! Consult with an experienced professional to get feedback for your personal situation.
Related tools:
Self-Storage Investment Market Screener: Find out if you’re entering a good market for a self-storage investment based on six key market metrics.
About the Author: Brett Lindenberg
