Investor Resource
Self-Storage Underwriting Checklist
Underwriting is where storage deals are won or lost. Before you put a facility under contract, work through every item on this checklist. The goal is simple: make sure the income is real, the expenses are honest, and the price reflects the asset you're actually buying.
1. Verify the income
- Pull 12–24 months of management reports, not just a broker pro forma.
- Compare physical occupancy to economic occupancy — the gap reveals discounting, delinquency, and concessions.
- Review the rent roll for unit mix, street rates vs. in-place rates, and long-term tenants paying below market.
- Identify ancillary income (tenant insurance, late fees, merchandise, truck rental) and confirm it's sustainable.
- Check delinquency aging — how much of the rent roll is 30/60/90+ days behind?
2. Normalize the expenses
- Rebuild the expense stack line by line: taxes, insurance, payroll, utilities, marketing, repairs, admin.
- Re-assess property taxes at YOUR purchase price, not the seller's current assessment.
- Get a real insurance quote — premiums have moved sharply in many markets.
- Add a management fee even if you'll self-manage; the next buyer will underwrite one.
- Watch for owner-operators who run expenses through the business or skip line items entirely.
3. Inspect the physical asset
- Roof age and condition — the single most common surprise capital expense.
- Doors, latches, and springs: count units needing replacement and price it.
- Asphalt/concrete condition, drainage, and grading.
- Gate, cameras, lighting, and access control systems.
- Climate-controlled systems: HVAC age, dehumidification, and utility cost history.
- Expansion potential: excess land, allowable density, and zoning.
4. Check the market
- Square feet per capita in a 1/3/5-mile radius vs. equilibrium for the market type.
- Mystery-shop every competitor: street rates, discounts, occupancy hints.
- New supply pipeline — permits, construction, and recently delivered facilities still in lease-up.
- Population and household growth trends in the trade area.
5. Stress-test the debt
- Underwrite at today's actual quotes, not last year's rates.
- Confirm debt service coverage at in-place NOI, not stabilized projections.
- Model refinance risk: what happens if rates are higher at maturity?
- Compare bank, credit union, SBA, and seller-financing structures.
6. Run the sensitivity analysis
- What does the deal look like if occupancy drops 5–10 points?
- What if rate growth is zero for two years?
- What if exit cap rates are 50–100 bps higher than entry?
- If the deal only works in the best case, it doesn't work.
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