308. How to Run a Small Self Storage Facility (and Automate It!)

Self Storage Income

AJ Osborne

How To, Investing, Business, Entrepreneurship, Education

4.9 • 591 Ratings

🗓️ 5 August 2025

⏱️ 56 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Investing in small self storage facilities is how almost everyone gets started. It’s where we began investing and probably where you did (or will), too. But sometimes small is a little too small. With too few doors, your expenses can quickly outweigh your revenue. Too big and you need to hire a manager. What’s the “sweet spot” in square footage that makes a great beginner self storage investment that’s easy to automate? We’re sharing it today.

Did you know that, even after investing hundreds of millions in self-storage, we still buy small facilities? It’s true. But, because we own so many, we know the pitfalls of running one, and how to automate it so you can work less—without hiring a full-time manager. How much do these facilities usually cost? What’s their profit and expense ratios? And what tech do we use to let customers rent without a single interaction from us?

If you’re about to buy, or currently own, a small self storage facility, this is your guide to running it right. Plus, if you’re a new investor, we have some cash flow tips that could save you when onboarding a new facility and all those expenses hit you at once—while you’re also chasing down rent payments. This could save your sanity next time you buy a small facility!

What you’ll learn in today’s show:

The square footage “sweet spot” that is big enough to profit but small enough to automate
Why you should always (ALWAYS) look into a line of credit before closing on a facility
The different types of hidden costs you’ll incur once you buy a self storage facility
How small is too small (it’s NOT worth the investment)
The actual expense ratio of a small self storage facility (it’s not what you think)

Get my FREE self storage starter pack to learn how to analyze, underwrite, and operate your next storage investment: https://www.selfstorageincome.com/start-podcast

🌳 Work with someone experienced in self storage loans at Live Oak Bank! https://www.liveoakbank.com/business-loans/self-storage/

🎙️ Do you have a great story to share on the SSI or AJ Osborne podcasts? You can now apply here! https://form.asana.com/?k=TGU88eU0bFTFW1iHcckuTA&d=1203571084143207

📉 Take advantage of today’s market conditions and invest with us: https://cedar.cc/invest

Transcript

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0:00.0	There's a lot of people looking at their first facility right now today. They're looking at smaller facilities because it's their first one. They're trying to figure out how do I make money with these things because I want to go in. I want to automate it. You know, I want technology. I want gates. I want security. I want all these fancy things. But they're having a hard time figuring out how to make those things pencil and what to invest in from a Kappex standpoint,
0:25.0	what not to invest in. How would you look at those things? If you were starting now today,
0:28.9	that was going to be the play. We're going to invest in small facilities, run a more automated system. What would be the process? So when we're looking at buying small facilities,
0:34.0	this is the number one thing I think everybody runs into.
0:44.4	What's up, everybody, and welcome to self-storage income. And today is going to be an
0:51.7	incredible podcast because Connor just turned 60.
0:56.0	60 years old.
0:57.0	60 years old.
0:58.0	Gray hair's coming in hot. It's very obvious.
1:02.0	Getting older, man. It's going. It's going.
1:05.0	Happy birthday, man. Thanks, dude. No, it's an exciting day. Big three five.
1:10.0	Big three five. And no, it's amazing. I was just talking to
1:13.2	somebody yesterday. Feels like my mid-20s, like 25 was literally just not that long ago.
1:20.1	Hard to believe it's been like 10 years. A lot of that doesn't change. It's like it just keeps
1:25.7	like it was yesterday. Like there's 10 years. There's 10 years.
1:29.7	Dude, yeah, that's crazy. But, man, I am so, so grateful to in the past 10 years, it's like when I was
1:35.6	25, man, that was when I first even started looking at entrepreneurship, looking at investing,
1:43.1	doing any of that. I think I was probably 25 when I met you
1:46.2	for the first time. It's probably right. Wow. Wow. Yeah, that's something else. To think 25, 26,
1:52.0	something like that. Yeah, because I was looking at like real estate investing and listening to a
1:56.5	podcast. I heard this crazy guy on Bigger Pockets talking about self-storage, you know.
2:00.9	And so yeah, we reached out or reached out and we got connected and all that stuff.
	...

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