Mini - Self Storage Units

Financing Mini Self Storage Loans

MFI specializes in obtaining permanent loans for mini self storage purchases or re-financing. It’s easy to apply for financing mini self storage unit loans and we have numerous wholesale commercial lending relationships with institutions that know this industry inside and out.

The Investment Angle

The actual costs of operating and managing the property is another main factor that is appealing to investors and lenders. Mini self storage operating costs can range from $1.50 to $2.00 per net leasable square foot. Other commercial real-estate properties could range from $2.50 to $3.50 per square foot. Apartments and multi family units, office warehouses, and retail shopping properties have to continually keep up the grounds, plumbing, electrical fixtures and a variety of other maintenance items, which usually require a substantial maintenance staff.
Lenders of financing loans on self-storage units like the numbers. The real story in comparing these properties to other real estate investments is that the investor can realize much higher ROI or Return On Investment. Secondly, the investor’s initial investment is a third or half of other investments. The investor does not have to be concerned about additional cash requirements involving tenant improvements or ongoing major maintenance.
self storage financing
commercial hard money lenders

Success and Failure Rates

The statistics for these investments are encouraging. Lenders financing purchase and refinance loans of mini self storage properties take note that the number of these properties that went into the FDIC or RTC for sale due to foreclosure was quite less than other real-estate properties being foreclosed. Of the 8 percent in self-storage facility failures, a large number of properties were taken back because they were collateral for other projects.

During those times when a certain market is experiencing an economic come back business grows, employment opportunities increase and sales of single-family homes start to rise.  Research by lenders of these property’s rent rolls during these times should show a higher percentage of mobile customers and people moving into the market for the first time. On the commercial side, increased business actively means an increased volume of U-Store-It commercial tenants.

On the other hand, when the economy starts to slow down, the same happens to business, employment and the markets  in general. However, the opposite effect still causes the same mobility that most often benefits mini-storage. People begin to move or selling their houses and moving into smaller homes or apartments. Commercial businesses pullback or look to these properties for storing inventories. Approving financing applications for loans on mini-self storage investments are attractive to commercial lenders.

A staggering economy does have a negative impact on this industry. During down turns in the economy, multi-family vacancy rates can increase as much as 25 percent, while office and retail vacancies increase as much as 30 percent. This is lost revenue to commercial office and retail properties. It is not recovered until the markets and the economy recovers .

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