Preparing to Purchase a Self Storage Facility, Part 7: Inspection Checklist

One of the most important parts of Due Diligence is your time spent reviewing the physical conditions of the self storage asset in which you are about to invest. In part 7 of our 8 part series on Preparing to Purchase a Self Storage Facility, let’s review the details for completing a property inspection checklist and a high-level overview of what you should look for when on site.

There are ten areas that you should be inspecting during the due diligence period with regards to the condition of the facility. Any deficiencies in these areas need to be identified so that you can establish a budget for Capital Improvements and Repairs and Maintenance. A proper inspection is imperative to avoid unforeseen expenses down the road. The best self storage buyers take their time or hire a professional company to do it for them.

Let’s start with the first item, the site itself. 

 OVERALL SITE CONDITION

Paving

• • Does the site have asphalt or gravel?
  • Asphalt
    • Is the asphalt in good condition?
    • If not, does it need to be ripped and replaced?
    • Does it need to be milled?
    • Does it need to be crack filled and seal coated?
  • Gravel
    • Is the gravel adequate?
    • Do you need to bring in more gravel and grate?

Drainage

• • Is the drainage for the drive aisles/parking lots in good condition?
  • Is there any evidence of standing water?
  • Are the catch basins clean and in good condition?
  • Pay close attention, especially in the Northeast to the walls of the catch basins. Are they in good condition? If block construction, are the blocks in place or are they showing signs of needing to be replaced/rebuilt?

Landscaping

• • Is the landscaping up to par?
  • What improvements need to be made?

Utilities

• • Are all utilities connected and functioning? Identify each supplier.
  • Well water or city water? If well, you will want to identify the age of the well pump and have well inspected.
  • Sewer or Septic? If Septic you will want to know when the last time the septic was pumped, and have an inspection of the septic system completed.

Signage

• • Are the signs in good condition and functioning?
  • If you are planning on rebranding the site, a full site survey should be conducted by a reputable sign company.

Fencing & Gates

• • Is the site fully fenced?
  • What type of fence? Iron? Chain link?
  • Is the fencing in good condition? What if any repairs to the fencing needs to be completed?
  • Is there a functioning electronic keypad system to operate the gate?

BUILDING ENVELOPE & STRUCTURAL FRAME

Exterior Walls

• • For both drive up and interior self storage facilities, what is the overall condition of the building(s)?
  • What is the condition of the façade?
  • For drive up buildings, are the columns between each door in good condition if they are block construction? If metal, does the metal show any signs of rust? Are there dents or cracks that need to be repaired?

Exterior Doors

• • Are all doors in working order?
  • What condition are the hasps in?
  • Is the paint on the door peeling or fading? Will you need to address this to improve the condition of the asset?
  • Is the weather stripping on the bottom of the doors in good shape?

Entry Doors

• • Are all entry doors functioning and in good condition?

 ROOF SURFACE AREA

Roof Surface

• • Identify what type of roofing system:
    • Rubber
    • Asphalt
    • Metal – Standing Seam or Screw-down
  • What is the overall condition of the roof?
  • Is there any evidence of standing water?
  • Is the flashing around HVAC units, drainpipes, vent pipes in good condition?
  • For screw-down roofs, are the rubber grommets on each screw in good condition or are they brittle and cracking? This is the number one cause of roof leaks on screw-down roofs.

Gutters

• • Does the site have a gutter system?
  • If yes, what is the overall condition of the gutters? Any rust or holes?
  • Is it pitched properly?
  • Is there any standing water in the gutters?

Downspouts

• • Are the downspouts in good condition with a solid connection to the gutters?

Drainage System

• • Where do the downspouts or roof drains empty?
  • If they are tied into an underground system, you might want to have a plumber or a company like a Roto-Rooter snake the system with a camera to identify any deficiencies in the piping.
  • Is there an advanced drainage system on site?
    • Oil Separator
    • Holding Tank

Now, let’s move into the building systems that keep the facility in good operating order.

ELECTRICAL SYSTEMS

Electrical Panels

• • Identify location of all electrical panels.
  • Are panels in good working order?

Outlets

• • Are there outlets in the office or on site?
  • Are they in good working order?

Lighting

• • Exterior Lighting
    • Identify type of lighting (LED, Halogen, Flood, etc.)
    • Is the lighting in good and working condition?
    • Is the amount of lighting adequate for the facility?
    • Do you need to retro fit the site to updated LED wall packs?
  • Interior Lighting
    • Identify type of lighting (LED, Compact Fluorescent, Fluorescent Tubes, Incandescent, etc.)
    • For interior units, do the lights in the halls work?
    • Do the motion sensor systems work to turn the lights on?
    • Do all the switches work to turn lights on and off?

PLUMBING SYSTEMS

Toilets

• • Are all toilets in good condition and functional?
  • Do they leak or sweat excessively?

Sinks

• • Are all sinks in good condition and functional?
  • Are there leaks underneath?
  • Do the faucets drip?
  • Do they drain properly or do they appear clogged?

HVAC SYSTEMS

A/C System

• • Identify type of system
  • When was it last serviced? Were there major issues?
  • What is the age of the system?

Heating System

• • Identify type of system
  • When was it last serviced? Were there major issues?
  • What is the age of the system?
  • If oil or propane, how often do the tanks need to be refilled?

Condensation Lines

• • Are lines in good condition?

Maintenance Records

• • Have the systems been regularly maintained? If not, you may want to have an HVAC vendor conduct an inspection depending on the size of the system.

FIRE & LIFE SAFETY

Fire Extinguishers

• • Are there fire extinguishers in place on site? This could be a requirement related to your city’s fire code. Check with fire marshal on requirement.
  • If fire extinguishers are in place, when was the last time they were inspected? You should see an inspection tag on each one with dates.

Smoke Detectors

• • Are smoke detectors present and working where required?
  • Are they current or expired?

Fire Alarm

• • Is there a fire alarm?
  • Is it working?
  • When was the last time the panel was inspected?

Fire Sprinkler System

• • Identify type of system (Wet/Dry)

Fire Sprinkler Flow Alarm System

• • Inspect to ensure that a flow alarm is in place and working.

Maintenance Records

• • Are maintenance records available?
  • Have the systems been inspected on a regular basis?

Next, let’s go inside the buildings.

BUILDING INTERIOR

 Interior Walls

• • Are all interior walls in good condition?
  • Are there any visible water intrusion issues?

Interior Doors

• • Are all doors functioning and in good condition?
  • Do the locks work and are there keys for each one?

Flooring

• • Is the flooring in good condition?
  • Are there any trip and fall hazards present?

Paint

• • If there is any paint, is it in acceptable condition?

Tile

• • Is there any tile floor in the facility? (Bathroom? Break Room/Kitchen?)
  • Is the tile in good condition and free from cracks and failing grout?
  • Are there signs of leaks, excessive moisture or mold?

Elevator Systems

• • Does the elevator work?
  • Are the lights inside the elevator functional?
  • Is it in good physical condition and appearance?
  • Has it been inspected recently and is it in compliance?
  • Request copies of last 3 years of elevator inspection records.
  • Request 3 years of maintenance inspection records, if available.

ON SITE RENTAL OFFICE

Counters

• • Are the counters, desks and working surfaces in good condition?

Office Furniture

• • Are the chairs for the customers and property manager in good shape?
  • Are the filing cabinets in good shape? Do the locks work?
  • Is anything broken and in obvious need of repair or replacement?

Computer Equipment

• • What is the age of the computer, printer, phone?
  • Does all the computer equipment work?
  • Do the monitors for the camera system work?

Lastly, you need to think about the township and zoning for the property.

MUNICIPALITY REVIEW

Local Building Department

• • Are there any outstanding violations?
  • Verify and request copy of Certificate of Occupancy.

Local Planning & Zoning

• • Are there any issues related to this location that you need to be aware of?
  • Are the signs in compliance with local ordinances? If not, does anything need to be done to get them into compliance?
  • Review the Use, Limitations, Variances, Grandfathered items for the parcel(s).

This is a high level overview of each of the 10 areas you should be looking at during your site visit. A typical 40,000 SF to 75,000 SF property inspection should take 3-4 hours on site if you are being thorough. If you do not have the comfort level to complete an inspection yourself, don’t worry, there are plenty of companies that will do a very thorough and complete Property Condition Assessment for you. These companies can even go as far as calculating a budget for any deficiencies they find. This type of service can prove invaluable if you don’t have the knowledge to do a proper assessment.

Bottom line, taking your time to do a thorough property inspection will protect you in the long run. Don’t skip out on this step. The last thing you want, 30 days after settlement on your new asset, is to be faced with an unexpected capital improvement because you didn’t take the time to inspect the facility properly and are now shelling out thousands of dollars to make repairs.

If you have further questions about completing a self storage property inspection, don’t hesitate to contact our knowledgeable team to get started.

Download our handy Self Storage Property – Physical Site Inspection Checklist >>