this means you need to be well capitalized to pay the loan and expenses for nearly 2 years while its getting filled up.

if you have deep pockets, this is a good way to go. or you can buy poorly run existing ones and upgrade them.

As the building costs are relatively low for storage facilities and the land has no up-front cost, it makes leasehold an inexpensive approach to playing the self-storage game. If the land is in the right location (and that is a reasonably big ‘if’), the returns can be very impressive.

There are some downsides, of course. The biggest ones are the limit to capital growth (as the lease period draws to a close, the value can actually drop) and the drain on cash flow resulting from the lease payments. You also have to be careful of not buying a business – real estate investors like real estate because it is passive. The last thing we want to do is find 200 clients to store their wares.

I am still crunching the numbers, so I can’t say I am going ahead. Ultimately, I need to source suitable (i.e. financially viable) expressions of interest from potential tenants (self storage companies). Perhaps I am procrastinating – this will be only my second commercial real estate deal.

As an aside, the idea of developing storage on leasehold land came to me from the aircraft hangar complex we are building right now. The entire airport is leasehold only and there is a LOT of vacant land non-airside (so you can’t easily move aircraft from non-airside to airside).

Can you tell me more about that self-storage seminar in Salt Lake City. Is there a website?

Also, you may be interested in checking out guides like these: http://www.ebc.com.au/product/product.asp?loc=1,27,12&admin= (I am sure they exist in the States).

Cheers, jp