All Topics / Value Adding / Self Storage Facility

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  • Profile photo of Ol PaintingOl Painting
    Member
    @ol-painting
    Join Date: 2003
    Post Count: 123

    Hi guys,

    Did anyone here even purchase a self storage facility? [baaa]
    What are good and bad sides?

    What sort of maintenance do they require?
    What would you recommend to budget for maintenance?

    I’m currently looking to buy 15 strata titled self storage units in regional NSW. I sorted our management. Numbers look not bad.
    I wonder if I haven’t missed something important.

    Any help will be greatly appreciated.

    Cheers
    Lesia
    [evo]
    http://www.vmstreamline.com

    Profile photo of L.A AussieL.A Aussie
    Member
    @l.a-aussie
    Join Date: 2006
    Post Count: 1,488

    There was an article in Property Investor about this a year or so ago.
    From memory the news from that article was that the industry was going through a boom, so the future danger was that the market could become over-saturated and the returns might drop away because of this.
    The upside was that the returns can be good, with little management, maintenance and tenant problems. I suppose this is why everone may jump in?
    I think they are classed as a commercial property by the banks, so your LVR will be lower, meaning you need a bigger deposit to get in. Also, because it is a commercial property, a lot of capital growth is tied to the rental returns. If the rents don’t increase, neither does your cap growth I suspect. If you owned the whole facility and the land then this is a different story.

    I guess you need to research the area where they are, try to find out why they are being sold – what is the occupancy rate, holding costs etc.

    If you are seeking long-term ownership and the returns are still good now, then it could be good, but if you are looking for a quick flip for profit the boat may have sailed.

    Cheers,
    Marc.
    [email protected]

    Profile photo of Ol PaintingOl Painting
    Member
    @ol-painting
    Join Date: 2003
    Post Count: 123

    Thanks,

    It was the great answer.

    The problem I’m facing right now is that banks do not want to give load for storage facilities. The best deal I got is with Bank West and it’s only for 60% loan. Two more lenders give 50%, but this is it.

    Cheers
    Lesia
    [evo]
    http://www.vmstreamline.com

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