Most new self-storage investors underwrite using a blanket "40% expense ratio" and call it done. That's the single biggest mistake I see.

Here's why it matters: self-storage expense ratios typically run 30-40% of effective gross income, but blending them into one number hides risk in specific line items — especially property tax reassessment post-sale, which can blow up your NOI in year one if you don't budget for it separately.

Quick framework instead:

1. Underwrite property taxes individually — check if the local assessor reassesses on sale (many counties do), and model the post-sale rate, not the seller's trailing number

2. Break out payroll/management, insurance, utilities, R&M, and marketing as separate lines

3. Model a downside case: economic vacancy +3%, expenses +10% — confirm your DSCR still clears 1.25x

Also worth checking: economic vacancy vs. physical occupancy. A facility can show 92% physical occupancy but only 82% economic occupancy once you factor in discounts, delinquency, and non-paying "occupied" units. That gap is where a lot of sellers' pro-formas quietly lie.

Happy to go deeper on underwriting mechanics if useful — this is the exact framework I use before making an offer on any facility.