Self Storage Facility

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.
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