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.
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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