Purchase-Contract Considerations

Self-storage is a booming $21 billion business nationwide. It has nearly doubled in size during the past decade, with one in 11 households renting space in nearly 50,000 U.S. facilities. No other business offers the return and the ease of ownership of self-storage.

People generally enter the business via two routes: they buy land and develop a new facility, or they buy an existing facility. With the difficulty in finding suitable land, obtaining the correct zoning and securing financing, purchasing an existing facility is often the easiest, quickest and least risky way to get started.

Once you find a site you want to purchase, how do you negotiate the contract? The following are pointers on what to include in the purchase agreement to protect your rights as a buyer.

Besides making sure you get good value for the purchase price, it’s important to have the right representation during contract negotiation. Typically, the seller is the only one represented by a real estate agent, and so the contract may lean in the seller’s favor. To counter this advantage, consider engaging an experienced self-storage broker to represent your interests. Generally, there is no cost for this service, and it could save you from spending too much and experiencing potential problems.

Many purchase contracts prepared by a seller’s realtor lack provisions designed to protect the buyer. For example, the buyer may assume a certain item is included in the purchase price, only to find out later it was omitted in the terms. If there’s something you want out of a sale, put it in writing; that’s the purpose of the contract.