You shouldn’t have a lot of headaches on any income property so long as you have the right property management team in place. Many investors try to manage their own properties, which is the first mistake. I know that issues can arise even when you have a manager, but instead of managing your tenants, manage your property manager. Self storage properties are cash cows, and they do have less headache than residential properties. But even with a self storage facility, you could have a bad manager as well. But I’ve seen many people try to manage their own properties thinking that they will earn an extra $50-$100 a month without using a professional manager. And that simply does not work. Plus, that investor will most likely never invest in income properties due to a bad experience. Just make sure that you have a good manager in place, wherever you buy. Hope this helps.
I recently sold my last single family rental house. I managed the properties myself and did not like dealing with the tenants on a day to day basis. Actually, that part of the rental business is what is keeping me out of buying more SFH. Even though it was a pain I was profitable with SFH.
I am interested in finding either an apartment building or self storage facility or RV storage. I am no longer interested in dealing with the public on a personal level. I will work with contractors to repair but I will hire professional management to take care of day to day operation with the tenants and if the numbers do not fit I will pass on the deal.
My dream is to find a Multi Family or Storage Facility in distress, high vacancy etc. buy it cheap. Then make improvements, clean, repair, fill it up with new tenants, then sell it. Right now I do not have any dream of holding these long term. Only long enough to buy fix and sell. Several years maybe??
I know a lot of you out there have both multi Family and Self Storage. I am interested in each and realize that each have their own unique headaches. However talking to several self storage owners, it seems that they have less tenant headaches than apartment owners. Since I am at a fork in the road and could go either way could you give me some pros and cons of each business.
My budget is under 1 million and would like to stay under 750K. I have looked and there are places I could purchase for that amount in the area.
Re: Multi Family or Self Storage??? - Posted by Ol’ AA/Fuel
Posted by Ol’ AA/Fuel on March 16, 2010 at 08:55:28:
You need to e-mail or call me-I built over 7700 apt. units-2 yr.s ago I stareted self storage withw a twist-no one in the country is doing this to my knowledgf-breakeven is 32% occ. @ 20 cents a ft. below anyrhing close to comparable–thanks-Chris
Re: Multi Family or Self Storage??? - Posted by Mark (SDCA)
Posted by Mark (SDCA) on March 09, 2010 at 11:59:38:
Either works.
I agree with your assessment about self-storage. Less to damage if it’s concrete block with a metal door.
Check your state laws but in many states you don’t evict. It is more of an auction repo. So that is much easier.
Expenses are typically lower. Quite a bit lower. However, the cap rates are often lower as well.
If you are going to self-storage, you might look into kiosks (like ATMs that can print leases, accept payments, sell locks etc). I have heard of some self-storage owners who ONLY use kiosks- no onsite managers at all.