Most beginners underwrite self-storage deals using the same expense ratio they'd use for multifamily (45-50%). That's a mistake that will make you overpay or walk away from good deals.

Self-storage expense ratios typically run 35-40% of gross revenue for a stabilized facility — lower than multifamily because there's no unit turnover cost, no in-unit appliances, and often no on-site staff needed once you're past ~400 units.

Here's the quick gut-check math I use before I ever build a full model:

• Small facility (<300 units, no climate control): target 30-35% expense ratio

• Mid-size (300-600 units, partial climate control): target 35-40%

• Large (600+ units, climate control, staffed office): target 40-45%

If a broker's OM shows a 50%+ expense ratio on a facility under 400 units, either the operator is inefficient (opportunity for you) or the numbers are padded (red flag). Either way, that gap is where your deal gets made or lost.

Cap rate targets to pair with this: secondary markets are trading 7.5-9% right now for stabilized assets, and value-add / lease-up deals should be underwritten to a 9-11%+ going-in cap to leave room for execution risk.

Full breakdown of market scoring, unit-mix modeling, and the exact automation stack I use to run this analysis is inside the Self-Storage Investment Playbook.