The short answer Buying a self storage facility comes down to verified income: occupancy, the rent roll, unit mix and collections, plus the condition of the site and any room to expand. Financing depends on how you will run it. SBA loans are for operating businesses, not passive investments, so self storage eligibility is case by case; confirm with an SBA lender early.
What should you look for in occupancy and the rent roll?
The rent roll lists every unit, its size, tenant, rent, move-in date and balance due. Ask for the current rent roll plus monthly occupancy reports for at least two to three years. Then check:
- Physical vs. economic occupancy. Units rented is not the same as rent collected. Discounts, free months and delinquent accounts all widen the gap.
- Delinquency and auctions. How many accounts are past due, and how often units go to lien sale.
- Street rates vs. in-place rents. If long-term tenants pay far below current rates, there may be room to raise rents, or the facility may lose tenants when you do.
- Bank deposits. Match reported revenue to deposits and tax returns.
Does the unit mix fit the market?
Compare the mix of small, medium and large units, drive-up vs. interior access, and any vehicle, boat or RV parking against what competing facilities nearby offer and what stays rented. Units that sit empty for months may be the wrong size for the area.
What about climate control and the buildings?
Climate-controlled units cost more to build and run, and often rent for more. Check HVAC age and capacity, roofs, doors and latches, paving, drainage, fencing, gate access, cameras and lighting. Colorado weather is hard on roofs and paving, so inspect them carefully.
Which management software runs the facility?
Most facilities run on property management software that handles rentals, payments, gate codes and delinquency notices. Find out which system is used, whether the data and online rental pages transfer to you, and whether the seller's reports come straight from the software or were prepared separately.
Is there land to expand?
Extra land can add value, but only if you can actually build. Confirm with the local planning department that self storage is allowed in the zone, that the existing facility is legally established, and what approvals an expansion would need. Check utilities, drainage and access for the expansion area before paying for it.
Can you get an SBA loan for self storage?
Sometimes, and this is where buyers should be careful. SBA programs are built to finance operating businesses that occupy their property. They generally do not finance real estate held as a passive investment for rental income. Self storage sits close to that line. It can qualify in some cases, generally when the buyer actively operates the facility (handling rentals, pricing and collections), but eligibility depends on the deal structure and how the facility will be run, and lenders apply the rules differently.
If you are buying self storage as an investment you will not run day to day, plan on conventional commercial financing instead. Either way, talk with an SBA lender before you make an offer. This is general information, not a loan offer. Read more on our SBA owner-user page.
Self storage due diligence checklist
- Current rent roll and monthly occupancy reports for two to three years
- Physical vs. economic occupancy, discounts and concessions
- Delinquency report and lien sale history
- Three years of tax returns, profit and loss statements and bank deposits
- Unit mix compared with nearby competitors
- Management software, data transfer and online rental setup
- Building, roof, door, HVAC and paving inspection
- Gate, camera, lighting and access control systems
- Zoning confirmation and expansion feasibility
- Property tax and insurance history
- Title, survey and a Phase I environmental site assessment if your lender requires one
How Goff CRE Group helps
Goff CRE Group, brokered by Nassar Realty, represents the buyer. We review the rent roll and operating history with you, set a due diligence period that covers financial and physical review, negotiate price and terms, and coordinate your lender, inspectors, title company and attorney through closing. Alex Goff is licensed in Colorado. More on our buyer representation, or see other business properties.
