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

65 snips

Aug 5, 2025

Practical talk about the ideal size for a small self storage facility and why mid-size buildings hit the profitability sweet spot. Exploration of how to automate operations with hardware, software, and remote access versus low-tech workarounds. A rundown of hidden onboarding costs, cash-flow pitfalls, and why lines of credit and reserves are crucial. Tips on when to operate locally and when to automate remotely.

Ask episode

AI Snips

Chapters

Books

Transcript

Episode notes

INSIGHT

Fixed Costs Make Small Facilities Costlier

Small facility economics are driven by fixed costs that don't scale with square footage, so smaller sites have disproportionately higher expense ratios.
AJ explains the hardware+software+marketing stack that makes a facility truly automated and why those fixed costs hurt 10k sqft assets more than 30k+ sqft ones.

ADVICE

Automate The Entire Rental Lifecycle

Automate customer lifecycle end-to-end with hardware that talks to your management software so renters can click, rent, open the gate, and be locked out automatically for nonpayment.
With true automation you can reduce on-site trips to once-a-week cleanup instead of daily trips for move-ins or overlocks.

ADVICE

Plan Post-Closing CapEx And Working Capital

Before closing, budget for three post-closing expense buckets: rebranding/onboarding CapEx, vendor/account changes, and working capital to cover cash flow timing gaps.
AJ and Conner suggest planning $20k–$50k depending on asset size to cover signage, website, contracts, and float during the transition.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

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