Uhaul rental income in Mini Storage complex

[Michigan CG]

I've appraised a few self storage facilities and I don't think any of them offered outside storage. ................

I have appraised multiple self storage facilities and I cannot remember one that didn't have outside storage.

 

[Michigan CG]

Counting the U-Haul income would be like counting the retail sales at a Hardware store that rents equipment. The 5,000 SF hardware store should not be valued by its retail sales but rather by its potential rental income of the real estate. Self storage income is the rental of the individual units, not an additional retail income stream. If I buy a self-storage facility and my wife sells cakes can we count that too?

 

[CANative]

It's hard to follow all of this but it seems like some are saying only include income that can be generated from buildings.

 

[CANative]

What about RV/Boat storage where they just rent parking spaces, maybe with covers? What about the income from black water clean dumping, washing vehicles, etc., etc?

 

[CANative]

How about coin-op laundry income in an apartment complex?

lol

If you don't include the Uhaul income what do you do with a comp that is a mini-storage with a Uhaul?

 

[Michigan CG]

How about coin-op laundry income in an apartment complex?

lol

If you don't include the Uhaul income what do you do with a comp that is a mini-storage with a Uhaul?

Everyone counts coin-op income from laundry in an apartment as it is related to the apartment business.

If I have a mini-storage comp with a U-Haul, I find a different comp.

How many (percentage) mini-storage facilities have U-Haul franchises? How many apartments (percentage) have coin-op laundry?

If I have a mini-storage I can lose the franchise or right to operate the U-haul operation. In my apartment I can't lose the right to the washing machine. The U-Haul operation is not linked to the real estate, the washers and dryers are.

 

[CANative]

If I have a mini-storage comp with a U-Haul, I find a different comp.

 

[Michael S]

I have appraised multiple self storage facilities and I cannot remember one that didn't have outside storage.

There are some in my market that offer outside storage but it's the minority of them. Not a lot of boats or RVs around. I know of a couple of places that specialize in RV and outdoor storage but around here indoor storage is a bigger deal because of all the dust and what happens to wooden furniture and other items when they're baking in a metal box in the middle of the summer.

 

[NachoPerito]

I included the truck rental income in this appraisal. It was apparent that the buyer gave it value. It isn't a Uhaul dealer so this establishment was just getting a cut and that makes it a much lower impact to the gross income (5% +/-). If it was an actual Uhaul owned storage facility that would be different.

I also include some retail sales for locks and boxes and am consistent when analyzing comps.

Until the AI textbooks and appraisal journals are officially discredited I will rely on them.

Outdoor uncovered RV storage is very common here. I include the income from RV parking, but don't include it when correlating a price per unit or price per square foot in the sales comparison approach. I only use it as a qualitative adjustment.

 

[Howard Klahr]

How many (percentage) mini-storage facilities have U-Haul franchises?

Roughly 100% of the U-Haul Self Storage Facilities?
And if it isn't a U-Haul then it is Ryder, Penske or Budget. Not that unusual to blanketly exclude the income.

I included the truck rental income in this appraisal. It was apparent that the buyer gave it value. ... I also include some retail sales for locks and boxes and am consistent when analyzing comps.

Until the AI textbooks and appraisal journals are officially discredited I will rely on them.

And how do the AI textbooks and the appraisal journal tell you how to approach the value as a "going concern" as opposed to real estate only? Did you segregate the business value from the real estate value as required by USPAP?

This not to state that you are incorrect in your approach, only that there is more you may want to consider.