309. Self Storage Demand 101: Know What (and What Not) to Buy

Self Storage Income

AJ Osborne

Entrepreneurship, Education, Investing, Business, How To

4.9 • 591 Ratings

🗓️ 12 August 2025

⏱️ 52 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Self storage demand—quite frankly, the most important factor when buying a self storage facility. Get it wrong, and you could lose tens or even hundreds of thousands when you sell. Get it right, and you’ve got cash flow, huge value-add potential, and the formula for a winning facility. This is the make-or-break of self storage, and even the newest investors can get rich with strong enough demand, while experienced investors can go broke getting it wrong.

So, you’re about to buy your first or next self storage facility—how do you measure demand before you buy? How do you tell what nearby facilities are charging and how full they are, and whether they’re even your competition? Today, we’re giving you a complete guide to self storage demand.

We’ll teach you how to measure your local demand and even predict future demand so you don’t buy in a declining market. Plus, who is the “ideal customer” for your storage facility? Other units in the area may not serve them, allowing you to fill a gap in the market. This is crucial for self storage investing, and we’ve already made the mistakes, so you don’t have to.

What you’ll learn in today’s show:

How to estimate current demand (and future demand) in your self storage market
Why occupancy doesn’t matter and how you can still get high revenue with vacancy
Why square footage per capita measurements are often wrong (and can throw you off track)
The customers who need self storage the most and don’t have enough space
Pinpointing your “ideal customer” so you can target them better than your competitors
Buying in a declining or small market? Get this right before you buy

—

Check out this previous episode: SSI 259. Turning Apartment Storage Lockers into Full-Blown “Micro” Storage Facilities https://www.selfstorageincome.com/podcasts/self-storage-income-2/episodes/2148839451

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/

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

Transcript

Click on a timestamp to play from that location

0:00.0	Today, Connor and I are focusing on the one thing, the only thing that matters in storage.
0:08.7	Demand.
0:09.5	Demand.
0:10.2	You could be the smartest self-storage investor in the world.
0:13.3	If there's no demand, you're going to fail.
0:14.9	And you can be an idiot.
0:16.4	An absolute moron.
0:17.9	And if there's a lot of demand, you will succeed and be wealthy to some point.
0:27.7	You cannot fight market forces. This is something that I think real estate people, they forget
0:34.7	because they assume that real estate always goes up. It's always there, right?
0:41.2	It's just always in the long run works. And so then they overlook a lot of key components.
0:48.3	And this happens a lot in storage.
0:50.5	And what short memories we have, huh? Yes. So short. Unreal.
0:54.0	And another problem with
0:56.2	storage is, I think, demands a lot harder to understand in storage than any other asset class.
1:03.8	Because you can kind of manipulate it, right? Like, at a certain point, everybody will rent. So if you were doing a dollar a month for a storage unit, you would be 100% full, even if everybody in the marketplace was 50% empty. Exactly. Because people at that point will go, I don't even need it. I'm just going to get it. Right? I'll go hang out in there. Yeah, yeah. I was even on a, I was on a call with one of our community members the other day. And we talked about, you know, they were excited because this facility had high occupancy. Yes. It's like, well, you get that aging report and make sure delinquency is not super high because that's another thing. So you could have a lot of great occupancy, but not paying tenants. And that's, in that, hence is the problem.
1:46.2	There's metrics that they look at and we assume that means demand.
1:49.8	It actually doesn't necessarily.
1:52.9	And so what we really need to go over and what we're going to talk about in today's podcast
1:58.3	is how to understand it. It's not just find it because also in storage,
2:05.3	it's not just there is demand or isn't it. If you look at a market, roughly all your vacancy
2:12.0	will be tied up in like two units. So you have a property that has 12 different types of units.
	...

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