4 Tips on How to Save Money When You Sell Your Self Storage Facility
If you're considering selling your self storage property, you may understand just how expensive that process can be. Increasing the curb appeal and taking care of deferred maintenance can often be fairly costly if you're looking for top dollar for your self storage property. Next, if you go the traditional route and list with a real estate agent, they will have additional fees which can range from marketing fees to commission fees which can be up to 6% of the sale price of the property. On top of that, selling a mini storage property will typically trigger a capital gains event and you'll be paying a very high percentage in taxes.
With all of that in mind, you may be wondering if you have any options to avoid these expenses. The answer is that, while they may not be able to be avoided entirely, our tips below outline how you can help minimize them.
Tip #1 - List For Sale By Owner
One option is to list your property For Sale By Owner. This means that you will need to pull together all of the information about your self storage facility to send to buyers when they request it. You'll also need to take your own pictures (or hire someone to take them) and then market the property yourself. Finally, you'll need to negotiate with the buyers or hire an attorney to do it on your behalf.
We wrote an entire blog post about listing your self storage facility "For Sale By Owner." Check it out by clicking HERE.
Tip #2 - Use a Flat Rate Listing Agent
This tip is similar to listing your mini storage yourself, but some agents offer a flat rate fee to put it on the MLS. While this can be more popular for residential listings, it can be done with commercial listings as well. Many agents use the MLS to find deals for their commercial buyers and this can be a good way to broaden the reach of your listing while saving tons of money in comparison to hiring a full service agent.
Tip #3 - Sell Direct To A Self Storage Buyer like Sell Self Storage Now
There are some companies that will buy your mini storage property directly without the need to take on the full task of listing the property for sale by owner. For example, at Sell Self Storage Now, we buy properties directly from owners that we keep in our portfolio. We buy properties of all sizes and in many different locations and conditions. We often will buy properties that need work or perhaps have a lot of vacancy. We work with you directly to get the information we need to make you a fair offer. There's never any pressure to sell, but our process is designed to make it as easy and streamlined as possible for seller's of self storage facilities to get a fair price for their properties with little work.
If that sounds appealing to you, we'd love to speak with you! Give us a call at (717) 687-1883 or fill out our form here.
Tip #4 - Owner Finance
Owner Financing can actually work with any of the other tips we listed above. While it might sound daunting at first, doing a seller "carry back" as it's sometimes called can be a easy and a great option!
When you sell a self storage facility, there's often a significant amount of capital gains taxes that you'll need to pay on the profits. However, if you owner finance the self storage facility, you're only needing to "realize" a portion of the profit each year according to the IRS. This is otherwise known as an installment sale and can be an excellent way to preserve the profit of your sale if you're not needing all of the money out at one time. Another advantage is it provides an on-going revenue stream for you just like your facility has in the past, just without any of the management or collections headaches! If you'd like to know more about what it might look like to do an owner financing agreement for your facility to help save money when you sell your mini storage, give us a call today at (717) 687-1883 and we'd love to chat!