How To Sell My Self Storage Business?

There are many reasons why someone would want to sell their self-storage property. Some have had the business for a while and want to retire, or some people are investors that want to flip the facility to cash in. No matter the reason why you want to sell your facility, there are important steps to take before you sell the facility to another entity. Below are some of the important steps to consider while selling your property.

Universal Storage Group has experience in both helping our clients sell their property and in acquiring properties from other self-storage owners. If you have questions in regards to selling your property after reviewing the steps below, contact our team, and will help you evaluate your property for a potential acquisition. 

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1. Start By Hiring A Self Storage Broker

The most common train of thought when it comes to selling a self-storage property is to try and sell the property yourself. This is the first mistake that other property owners make. Working with a reputable self-storage broker will help you take the emotion out of the sale of your property and will provide you with someone experienced in self-storage property sales. Self Storage brokers will help take the stress off of your shoulders and will help you squeeze the most out of the sale of your property as possible. 

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2. Consider Your Rental Rates vs Your Market

New Tenants - Every property manager has some process that they follow to evaluate the current rates in their market. Although this process may exist, it only sometimes gets completed or executed frequently Rates change on a week-to-week and sometimes day-to-day basis. If you are considering selling your property, you’ll want to make sure that your rates are in line with the market so that any new tenant that rents a unit is at current market rates.

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Current Tenants - If you want to maximize the sale price of your property, you’ll want to make sure your current tenants are close to the current market rates. This does not mean that you need to significantly increase your current tenants' rates tomorrow. Raising rates is a sensitive task and needs to have a well-thought-out strategy behind it. You will need to map out over what period you will raise your tenants' rates till you get them to the current market rates. This could take some time and might not get completed in a month or two, but following a well-thought-out strategy will protect and increase your current revenue while also positioning your facility to have a higher sale price in the future. 

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3. Re-Evaluate Your Facility’s Curb Appeal

When was the last time you evaluated the look and feel of your property? If you are considering selling your facility, you may want to evaluate it now. Taking the time and money to make sure that your property is freshly painted and that the landscaping and signage are fresh will be critical to maximizing your return on the sale. If you take the perspective of the buyer, if they were considering purchasing a facility that needed to be repainted, would need new signage, landscaping, and other renovations, they wouldn’t be willing to spend the highest amount to acquire that facility. You want to make sure your facility is appealing to the eye so that when your buyer evaluates  the facility, they feel good visually about the purchase they are making. 

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4. Make Sure All Government Certificates Are Up to Date

You must ensure that your facility is up to date on all certificates with the city. This would include all permits, licenses, and other legal documents. If you intend to sell your facility, the buyer will want to know that the property is in good standing with the city and is not facing any potential fines or penalties. By taking the extra time to proactively check in on any potential expiring legal documents, you will be able to ensure that the sale of your property goes smoothly without any hiccups. 

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5. Establishing A Digital Marketing Presence

Digital marketing is a critical element of the operation of a self-storage facility. Not only is it important for the ongoing operation, but it can also have an impact on the sale price of the property. Having a strong digital presence can help attract buyers, and an established strategy will help those buyers understand the potential for growth in the market. By having an effective marketing strategy, you will be able to create a positive perception of your facility and increase its perceived value. This will then lead to a potentially higher sale price when you get to the negotiation part of the process. 

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6. Understanding Your Cap Rate

Your cap rate will be an important metric once you try to sell your self-storage facility. This metric determines the potential return on the investment for the buyer. The cap rate is calculated by dividing the net operating income (NOI) by the property value. The higher the cap rate, the higher the potential return on investment for the buyer. As you consider selling your property, you’ll want to improve this metric because it will be used as a tool to negotiate a higher sale price for your facility. 

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7. Aggressive & Realistic Sale Price

It is important to understand the balance between being aggressive and realistic in your property’s sale price. Naturally, you want to get the highest possible price for your facility, but it is also important to understand current market conditions and the value of your property. If you are too aggressive with your sale price, you could deter potential buyers, which will result in your property being on the market for an extended period. A reputable broker will be able to help you set proper expectations and will help you develop a pricing strategy that will help you get the most you can based on your current situation. 

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We Evaluate Properties for Acquisition

Universal Storage Group is an award-winning self-storage solutions provider in the United States and has worked around the world for over 30 years. Our team provides full-service third-party management, á la carte or comprehensive training programs, and start-up or conversion services, including facility design, feasibility studies, brand development, and property acquisitions.

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If you have questions in regards to selling your property after reviewing the steps above, contact our team, and we will help you evaluate your property for a potential acquisition.