How to Sell Your Self-Storage Facility: A Step-By-Step Guide

Maybe you’ve recently inherited a self-storage facility you don’t know what to do with or maybe you’ve been in the self storage business for over 30 years and want to retire.

Regardless of how or why, you’re ready to sell so you must be wondering how to sell your self-storage facility.

From initial sales prep, to proper documentation, and finding qualified buyers, this post will outline the basic steps you’ll need to take in order to sell your self-storage business.

1. Decide How to Sell Your Self-Storage Facility: FSBO or Storage Broker

When it’s time to sell a self storage business, you may be wondering if it’s better to use a broker or to sell your facility by for-sale-by-owner (FSBO) to try to save money selling.

Even if you are a small independent operator and plan to sell your facility FSBO, it’s a good idea to find out how a storage broker works. 

A self storage broker can help you price your self-storage business to get the best possible price. They will assist you in getting your storage documents in order for a smooth selling process.

Self storage property brokers are usually experienced and skilled in completing real estate transactions in the storage industry. When working with a broker, be sure to use one that has a proven track record in self-storage facility sales and not just commercial real estate like apartments or other types of businesses.

Storage properties are unique and you’ll want a broker to have the storage industry knowledge necessary to understand every detail. Not to mention that most storage brokers have a long list of self storage contacts.

A broker could connect you with a contractor to make repairs or may already have dozens of buyers ready to buy your facility before it even hits the market.

Whether you decide to use a real estate broker or sell your facility yourself, the remaining steps are the same. The only difference is who will be completing the steps and how they’ll be compensated.

2. If You Decide to Hire a Broker, Do So ASAP

You’ll want to secure a storage real estate agent many months ahead of when you actually plan to sell your storage business.

Missed this deadline? That’s ok! You can still sell your storage facility. It just might take a little longer than desired.

If you want to sell your facility fast and NOT deal with the headaches of the traditional FSBO or paying commissions, reach out to us to obtain an AS-IS offer for your storage facility. We buy self storage facilities nationwide in any condition!

3. Get Your Self Storage Documents in Order

After you’ve decided to sell your self storage business, it’s time to get your documents in order. Now this step is often easier said than done but getting started early will help ensure you have the documents you need when the time comes.

You’ll need to get financial records, preferably from the last two years at least.

Financial records should include rent rolls, utilities, any employee salaries, maintenance expenses, insurance, taxes, gross revenue, late fees collected, past due accounts, any upcoming auctions, etc.

Even if you are selling a storage facility with high vacancy, it is important to include the rent roll.

4. Make Capital Improvements to the Storage Facility

As a self-storage owner looking to sell, you’ll want to get the highest price possible. If the facility being sold hasn’t been well-maintained, it will negatively impact the value of your self-storage building.

Are any of the self-storage units in bad shape? Does the facility have any deferred maintenance you can complete in order to increase the value of your storage property? Can you make capital improvements or improve your facilities curb appeal?

Improving what may seem like minor things can actually make a big difference to a storage investor who is looking to buy your self-storage business. It can be as simple as a fresh coat of paint on the doors, a deep cleaning, or installing new locks and lights.

Just make sure you are improving the right things and not throwing money down the drain when you are figuring out how to sell your self-storage facility.

5. Keep Your Rental Rates & Financials Stable

When you’ve begun consider selling your facility, you may be tempted to increase rental rates before advertising your facility for sale.

Remember that those buying a self-storage business will typically want to review one to three years of financials to determine a value for your property.

A dramatic and recent increase in economic occupancy will not substantially improve the overall financials of your facility. Especially if this recent rental rate increase appears to be unjustified to potential self-storage buyers.

6. Determine the Market Value of Your Facility

How to sell your self-storage facility and determine a price can be a challenge. A good broker experienced with how to sell a self-storage facility will have the knowledge to produce a fair valuation for your property. This will help to ensure you are not over-selling or under-selling your property.

If you price your facility too high, then prospective buyers may not even submit an offer. If you price your self-storage properties too low, you may risk leaving money on the table.

To obtain a rough idea of the value of your storage facility, considering use the cap rate valuation method. The capitalization rate, often called the “cap rate,” is a measure of the return on investment for a real estate property.

The higher the cap rate, the higher the return. For example, if a property has a cap rate of 10%, that means it will produce $10 of income for every $100 of investment.

You’ll want to consult with your broker to calculate estimated cap rates in your local real estate market and use that data to inform you as you set a sale price for your storage space.

7. How to Sell Your Self-Storage Facility on the Market

If you are looking for how to sell your self-storage facility for the most money, it’s important that you are able to get it in front of as many buyers as quickly as possible.

A storage brokerage will handle the marketing of your storage units but if you are doing it alone it’s a good idea to get it listed on all of the major websites.

A few good websites to list your storage facility are Bizbuysell.com, Loopnet.com, and Crexi.com.

Now just sit back and wait for the offers to come in! If you are selling FSBO, there are some advantages to selling your storage facility directly to a buyer.

You’ve Just Learned How to Sell Your Self-Storage Facility

Now that you’ve just reviewed are basic steps for how to sell your self-storage facility there are a few key steps you should remember.

First, consult with a real estate agent who specializes in storage facility sales to get an accurate valuation or decide to sell your facility FSBO.

Next, get your documents in order and make any capital improvements that you can.

Finally, price your facility and market your storage business online across multiple storage websites.

With these steps you will be well on your way to successfully selling your self-storage facility.

If you’ve unsuccessfully tried selling your storage facility yourself or with a broker, feel free to reach out to us to obtain a fair offer for your storage property!

Have more questions about how to sell your self-storage facility? Let us know below!