Jim, it's unfortunate that you had so many difficulties in your storage business.  Thankfully we've had a very different experience with our small facility.  Having them managed by the local real estate agent means I never have to deal with our clients.  Of our 30 we currently have 2 that are slightly….several actually pay 12 months in advance to receive a discount!  As soon as any are late paying my property manager is on to them and brings it up to date.

You are spot on re having a contract in place with the tenants – when we purchased they didn't ever sign anything and it was all done on a handshake.  The first thing we did was put agreements in place with all existing and new clients.  Clients know their obligations and our expectations are clear and thankfully we haven't had any of the issues you've mentioned. (Interestingly neither did the previous owners even with just a handshake agreement!)

I guess this thread highlights the importance of completing thorough due diligence before taking on a storage facility as an investment as no two are the same.

I believe that NAB have been doing up to 7 recently.

For us, we figured out how many $ per year income we needed to quit our jobs and when we wanted to be in that situation…..May 2014 is our date!

Since then we’ve been collecting positive cashflow properties, improving them to increase the rent and also doing other development projects for lump sum gains. Whilst I’ve been eyeing towns in Qld and WA I’ve been able to find properties with great returns right here in Tassie in good, low risk towns/cities.

Oh, our plan also includes spending management (budget) – it won’t matter how many $ are created or earned if spending is not under control!

Good luck making your plans.

Cheers, Tracey

Thanks Kristin – excellent explanations.
Cheers, Tracey

Don't have any books to suggest but this website has some solid information on it: http://www.selfstoragesalesaustralia.com.au/index.ews

Sure thing.
Our weekly rental rates on the website and we are a shade under the others so are fully occupied most of the time. You’d need to check the market rates in your area.
Our gross annual income is $48K and net of almost $37K after the following expenses:
Advertising; Pest Control; Phone; Power; Rates; Water; Property Mgmt (@12.5% by local real estate agent, paying a premium here and potential to save); Land tax; Insurance (buildings only as clients are responsible for the insurance of their property)
Ours are on the market for offers over $450K, giving the buyer a minimum 8% NET.
Hope this helps!
Cheers, Tracey

I agree with Luke…..

I do these on a back of an envelope rather than a serviette as they don't fall apart! What you've calculated looks reasonable and a quick calculation like this will certainly tell you whether it's worth further investigation.  There may be easements, overlays, access to services etc. etc. that will change these numbers but they're a good starting point.
Without knowing the area it's difficult to confirm your assumptions re sales price and the costs.
The GST calculation is overstated as it's 1/11th of the sell price, unless you use the margin scheme in which case it would be less. Private message with the location if you would like a more detailed answer…
Cheers, Tracey

This probably also ties in with another post of 'house vs units' eg. if you own a unit in a block of eight only 1/8th of the total land value applies to your dwelling.

At one of our properties the value of the land value attributed to each apartment is just $25K which helps minimise the land tax situation.

Depends if you want them out….if you do you can always serve notice to vacant as soon as they are late with their rent, meaning that personalities are kept out of it.

Tracey