Listing a self storage property for sale may seem like something that should be easy; after all, you receive twenty calls a month from interested buyers, right? Well, not quite. Putting a self storage property on the market should be done with careful consideration and precision. A decision that has been made after the proper research has been done.
Here are a few tips that the team at Investment Real Estate has put together based on twenty-two years of experience selling hundreds of self storage facilities.
- Work with a self storage broker
- Have your financial records in order
- Address capital improvement needs
- How secure is your facility
- Consider unforeseen hurdles
- Is the pricing of the facility correct
- Set the right price
Work With A Self Storage Broker
Selling a self storage property is not something that an owner may want to do without advice and expertise from an experienced consultant. That broker should have a solid track record of successful closings and knowledge that demonstrates they know how to add value to a property to make it more appealing to buyers.
The right broker for your facility is someone that will understand your market, the timing, and has been present in the self storage real estate market for years. Selling self storage facilities is not something to try without experience, especially if you want to get the full value that your property can and should bring on the market.
Have Your Financial Records In Order
An investor’s offer for your facility will be driven, in large part, by the anticipated revenue they will achieve from buying your property. If your numbers are not clean, accurate, and error-free, you can expect to run into issues with experienced buyers. Buyers look for a clean due diligence process that matches the brokers offering memorandum.
Excellent record keeping is a must to make the transition from one owner to another as seamless as possible. Also, it makes it easier for you and your self storage broker to calculate revenue streams and future earnings potential that can help buyers write more aggressive offers for your facility. Your records should be as accurate and detailed as possible, completely representing the annual income and expenses generated at your self storage facility.
Address Capital Improvement Needs
This holds true in just about every real estate market. Sealcoating blacktop, adding bollard covers, repairing metal damage and keeping the facility neat and tidy can help achieve a higher quantity of competing offers.
Even simple fixes like replacing malfunctioning lights or replacing worn out and faded signs, especially around the facility entrance, can really help make a great first impression on a prospective buyer for the property. The best part is that most of these fixes can be relatively low cost versus the return gained through higher offers.
How Secure Is Your Facility?
Ideal rental customers are very concerned with security. Likewise a prospective buyer is going to be looking for well-planned and executed security measures that will keep renters happy over the long term, and attract new renters.
Electronic security gates that use security codes, bright lighting, and even newer camera systems with remote viewing access and high-definition color images are very attractive security elements for investors.
Are There Any Unforeseen Hurdles Prior To A Sale?
An experienced self storage broker is going to be able to help you determine if you have any parcel or property issues that might slow down or even kill the sale of your facility. Hurdles such as property liens, parcels partially in a flood zone, environmental red flags or tax issues can bring a sale to a screeching halt. Make sure that you disclose potential issues to your broker, prior to listing your facility for sale, so that each item can be resolved prior to listing your facility for sale.
Asking Too Much, or Too Little?
The self storage buying and selling market can be extremely competitive. Determining the value of your property is a moving target based upon capitalization rates, condition of your property, geographic market and financial market fluctuations.
This is where a self storage broker can be extremely helpful. They do the market research and have their finger on capitalization rates for comparable sales. Their knowledge of the target market and how your facility stacks up against the competition can help you set the right price. Plus the right price can often turn into a better financial result in the end.
Still Have Questions?
The experienced team of self storage brokers at Investment Real Estate is ready to help you. Selling a self storage property is not something that anyone should have to handle on their own. If you are considering selling a self storage facility, and have questions about the best course of action, contact the team at IRE today.