Expenses at the property include these basic categories:
- Real Estate Taxes
- Property Insurance
- Repairs & Maintenance
- On-Site Management
- Off-Site Management
Generally, expense ratios range between 30% and 50%.
The following is a chart that summarizes each expense category in detail.
Currently, the biggest hot button expense impacting the value is real estate taxes.
Self storage product across the nation can range from $30 to more than $400 per square foot. The decline in capitalization rates coupled with the improvement in the economy has resulted in significant increases in value across the market.
Self storage is technically an industrial use, and some assessor’s continue to value it as a storage warehouse use, which can result in a significantly lower value. However, with the influx of sales over the past three years, assessors have realized the value of a self storage facility. Therefore, assessments are on the rise, as many states require them to be based on 100% of market value. It is very important to understand the tax laws in the state and to forecast accordingly, particularly if a sale is involved.