Despite the “unsexy” nature of renting out garages and lockers, self-storage facilities quietly rake in $40 billion a year across over 50,000 locations in the U.S. And unlike multifamily units or commercial office buildings, storage units continue performing through recessions, job cuts, and market dips.

So what’s a self-storage business really worth—and how do you make one more valuable?

The Resilient Power of Storage

Self-storage is one of the rare businesses that thrive when people are both doing well and struggling. During economic booms, people buy more stuff and need space to store it. During downturns, they downsize homes or shut down businesses and need somewhere to stash their belongings.

That built-in resilience is why 80% of the industry is owned by private investors or independent operators. It’s also why storage is increasingly seen as a better investment than apartments or office space.

Trends Shaping the Self-Storage Industry

This isn’t your grandpa’s rusty lock-up unit anymore. The industry is evolving in response to modern consumer needs and expectations.

Tech Upgrades
Mobile apps let users reserve units from their phone. Online sellers use storage as overflow warehouse space. Automated kiosks and advanced security systems cut overhead and minimize theft.

Aesthetic Appeal
Over 60% of storage customers are women, so design matters. Modern facilities feature bright lighting, updated landscaping, and spotless interiors. The goal is to feel more like a boutique and less like a junkyard.

Generational Drivers
Millennials prefer mobile lifestyles. Boomers are downsizing. Together, these groups make up nearly half the U.S. population—and both are driving up demand for short- and long-term storage.

Valet & Portable Storage
Why drive to a facility when a storage company can drop the unit at your house, pick it up later, and store it for you? It’s the Uber-ization of self-storage.

How Self-Storage Businesses Are Valued

The basic formula for valuation is simple:

V = B / C

Where V is value, B is Net Operating Income (NOI), and C is the capitalization rate (cap rate). NOI is revenue minus operating expenses (excluding debt payments). Cap rates for storage typically range from 6.5% to 8%, depending on location and condition.

Let’s say your facility generates $200,000 in NOI, and the local cap rate is 7%. That gives you a valuation of about $2.86 million.

And here’s a pro tip: after buying a facility, property taxes are reassessed, often increasing dramatically. Appealing these tax assessments can significantly reduce your expenses and raise your business value.

How to Increase a Facility’s Value

Small changes can lead to big gains. For example, investing $20,000 in a new paint job can increase your valuation by $50,000–$100,000. Why? Because aesthetics matter to both customers and appraisers.

Other value-boosting strategies:

• Digital recordkeeping: Organize financials, tax docs, and tenant data for transparency and smooth operations.
• Security upgrades: Install biometric keypads or smart locks. Customers feel safer, and facilities can charge more.
• Customer experience: Clean, well-lit, and friendly goes a long way in reducing vacancy and boosting long-term value.

Financial Planning Principles for Smart Investors

The presentation also included helpful general rules:

• Save 1% of your home’s value for ongoing maintenance.
• Avoid paying interest on depreciating assets (like vehicles).
• Always take full advantage of your employer’s retirement match.

While not specific to self-storage, these guidelines reinforce the discipline needed to invest wisely and sustainably.

So, What’s It Worth to Own a Storage Facility?

According to investor Rat Kenodia, self-storage businesses are one of the most stable, scalable, and low-maintenance real estate assets available today. They outperform multifamily and commercial properties in downturns and offer fewer headaches.

When properly maintained and modernized, a self-storage facility can become a recurring cash-flow machine with strong upside potential—and best of all, it works quietly in the background while you focus on your next investment.

Whether you’re looking to diversify your portfolio or just want something that won’t keep you up at night, storage might just be the real estate goldmine you’ve been overlooking.

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