Real Case Study: How Much Does A Storage Facility Actually Make?

Self storage investing has exploded in popularity over the past few years, and for good reason. It's one of the few real estate asset classes that can deliver strong cash flow, long-term appreciation, and operational simplicity.

But if you're new to the space, you’re probably wondering: how much can you expect to make from owning a storage facility? Is it worth the hype?

Today, we’re breaking it down with a real-life case study: a 50,000-square-foot storage facility that we purchased for $2.5 million.

You’ll get an inside look at how much money it’s making, the operational changes we had to make to turn it around, and, most importantly, the key lessons you can apply to your own storage investments.

Let’s dive in and see what it really takes to create a profitable self-storage business.

Understanding the Facility: A 50,000 Square Foot Opportunity

This wasn’t a brand-new, polished facility. It was a classic mom-and-pop storage property, a mix of paved and gravel areas, inconsistent rent rates, outdated management, and plenty of underperformance.

We purchased it for $2.5 million, fully aware it needed work. But like many facilities across the U.S., it had a serious hidden value. Most storage facilities aren't the shiny, multi-story complexes you see along highways. They’re small, individually owned, and often poorly managed, leaving room for massive operational improvements.

Instead of a full rebuild, we focused on professionalizing operations: enforcing collections, raising outdated rents, and upgrading systems. With about $800,000 invested, we positioned the facility for significant long-term growth, all without major construction.

The real opportunity in storage? Finding these underperforming assets and turning them around.

Why This Storage Facility Had Untapped Potential

From the start, it was clear this facility wasn’t operating at its full potential. It looked like many mom-and-pop storage properties across the country—functional, but poorly optimized.

Here’s what stood out:

• Under-market rents: Many tenants were paying up to 50% less than current rates, simply because their rents hadn’t been raised in years.
• Poor collections: Some tenants hadn’t paid in months but still occupied units, costing the facility valuable income.
• Weak operations: The property was run more like a hobby than a real business, with little focus on marketing, tenant management, or revenue optimization.

Unlike polished, fully occupied storage facilities, this property had serious gaps, but that’s where the opportunity was. We didn’t need to rebuild it. We just needed to fix the operations and unlock the revenue that was already there.

What We Did to Fix It (Without Major Construction)

Instead of rushing into expensive expansions, we started with what mattered most: operations.

The facility we acquired ran its business out of a notebook, literally. Although basic software was in place, it wasn’t being used to drive revenue—it was more about convenience for the owner than profitability. Our first step was transforming it into a professionally managed, revenue-optimized business.

Here’s what we focused on:

• Rent Increases:
  Many tenants were paying outdated rates, sometimes half of what the current market demanded. We implemented a gradual rent adjustment strategy, bringing legacy tenants up to fair market value without causing mass move-outs.
• Collections Enforcement:
  We tackled delinquent accounts head-on. Units that hadn’t seen payments in months were either brought current or moved through the lien and auction process. Just improving collections alone added roughly 10% in gross revenue.
• Modern Software and Systems:
  We upgraded from outdated record-keeping to a full property management platform that handled online rentals, autopay, tracking of delinquent accounts, and operational reporting. This reduced human error and allowed us to manage the facility efficiently at scale.
• Light Capital Improvements:
  Rather than a full rebuild, we focused on strategic upgrades: resealing the asphalt, repairing roofing issues, updating the office, adding high-quality security cameras, and modernizing the gate system. These upgrades improved customer experience and facility appearance without massive cost overruns.

In total, we invested around $800,000 after the acquisition, bringing our all-inclusive cost to about $3.3 million.

And critically, none of this was based on speculative “maybe someday” returns. These were real, measurable improvements that immediately impacted income, collections, and overall facility value.

How Much Money Does the Facility Make Today

Here’s the current performance snapshot:

• Monthly Gross Revenue: ~$50,000+
• Expense Ratio: ~30% (higher early on due to improvements, but expected to decline)
• Annual Net Income: ~$250,000

Even at a 30% expense ratio, the net income is strong, and we expect it to improve further as the facility stabilizes.

Key takeaway: We’re generating a 10% cash-on-cash return without even completing future expansions or fully optimizing rent.

And here’s the kicker: this is happening in one of the toughest storage markets we've seen in recent years (lower occupancies, declining rents).

Why We Paid What Seemed Like a “High” Price

At the time of purchase, it genuinely felt like we were overpaying. Based on the facility’s existing net income, the numbers didn’t scream “deal of the century.” But there was a major reason we moved forward anyway: we saw hidden value that others would miss.

Most investors only consider current income, but we looked at what was realistically achievable. This facility had a mountain of untapped revenue locked behind poor operations, not market weakness.

Here’s why we were confident:

• Rent Raises:
  Many tenants were paying far below market rates. With a structured, gradual income growth plan, we could unlock major growth almost immediately.
• Collections Enforcement:
  Units occupied by non-paying tenants represented dead weight. By enforcing collections and moving non-payers through the lien process, we could quickly recover lost income.
• Better Marketing and Management:
  With proper systems in place—modern software, clear online presence, and professional processes—we could drive higher occupancy at better rates.

In short, the opportunity wasn’t speculative. It was sitting right there, clear and measurable.

While we paid $2.5 million, the facility’s real value, once properly managed, was much closer to $4 million.

And now, just a short time later, the numbers are proving it.

The Work Wasn’t Easy (But It Was Worth It)

Turning around the facility wasn’t a quick flip:

• We had to kick out nonpaying tenants.
• We operated through seasonal revenue fluctuations.
• We fought through supply chain issues during COVID, which delayed critical repairs.

Value creation in storage is a long-term game. It often takes 18–24 months (or longer) to fully stabilize a turnaround property.

But the reward is exponential: when gross revenue doubles, net operating income can triple or quadruple, thanks to fixed operating expenses.

Why Long-Term Financing Was Key

One important factor behind our strategy: we locked in a 4% interest rate for 10 years.

This long-term, low-cost financing gives us breathing room to execute the turnaround without worrying about rising rates or being forced to sell prematurely.

In self-storage (and real estate in general), having the right financing structure is just as important as buying the right asset.

Tip: Always match your loan term to your turnaround timeline to avoid getting caught in a "value trap" where you’re forced to refinance or sell before you’ve finished the work.

Lessons You Can Apply to Your Storage Investments

If you're thinking about investing in self storage, this deal highlights a few critical takeaways that can help guide your strategy:

• Look for Operational Inefficiencies:
  The easiest wins often aren’t found in expansion or new construction; they’re hidden in bad operations. Facilities with under-market rents, poor collections practices, or outdated management systems represent low-risk, high-reward opportunities if you know how to fix them.
• Don’t Be Scared of “Ugly” Facilities:
  A site that looks rough around the edges isn’t a deal breaker. Cosmetic improvements are relatively cheap. What matters most is the revenue engine behind the scenes. If the operations are broken, that’s where the biggest upside lives.
• Prioritize Stable Financing:
  In a changing interest rate environment, securing long-term fixed-rate loans is critical. The last thing you want is to fix up a facility, only to be squeezed by rising debt payments later. Give yourself breathing room with smart, stable financing.
• Plan for the Long Haul:
  Real value creation doesn’t happen overnight. Raising rents, improving occupancy, and stabilizing income take time. Be patient, be disciplined, and remember: massive wins in storage often come from years of compounding small improvements.
• Understand Your Local Market Deeply:
  National headlines about self storage trends are interesting, but they won’t help you manage a local facility. You need to understand your area, including rent comps, the supply pipeline, occupancy trends, and customer expectations. That’s where smart underwriting starts.

Success in self-storage isn’t about finding perfect properties; it’s about seeing imperfect properties clearly and knowing how to unlock their true potential.

Storage Facility Investing in 2025 and Beyond

The self-storage industry is maturing, but the fundamentals remain strong.

Even as some markets soften, there’s a massive opportunity in small and mid-sized facilities that need modernization and better management.

Automation, better marketing, professional systems—these are the tools that allow smaller investors to compete with institutional players without massive overhead.

We expect smart operators who focus on long-term fundamentals to continue doing well, even in more challenging times.

Final Thoughts: Storage Investing Is About Creating Value

This real-world example shows exactly how much money a well-run storage facility can make, and why the biggest gains often come from operational improvements, not from expensive expansions or flashy renovations.

By simply cleaning up management practices, enforcing payment collections, improving the customer experience, and steadily adjusting rental income to meet market rates, you can dramatically increase both cash flow and property value, without building a single new unit.

The lesson is clear: It’s not about buying a perfect facility. It’s about creating one. The real skill in self-storage investing isn’t just finding deals—it’s knowing how to unlock hidden value once you own them.

If you want a full walkthrough of this case study (plus even more strategies you can apply to your next deal), be sure to watch the full YouTube video here.