Self-Storage ROI Calculator

This calculator measures the capitalisation rate of a self-storage facility: the annual net operating income the facility generates, divided by its price. At the sample figures (a 2,000,000 facility with 200 units at 150 average monthly rent, 85% occupancy and a 35% expense ratio) the tool returns 9.95%. Cap-rate ranges of roughly 6 to 9% are commonly cited for stabilised self-storage facilities, so the sample result sits above that band. What puts it there is the price relative to the income the other inputs generate: at the sample NOI, the band corresponds to a price of roughly 2,210,000 (for a 9% cap) to 3,315,000 (for 6%) against the 2,000,000 used, and the gap illustrates how sensitive the figure is to that relationship.

How the calculation builds up

The build-up runs in four steps. Gross potential rent is what every unit would earn at the average rent: units × rent × 12. The occupancy percentage scales that down to effective gross income, the revenue the occupancy assumption actually collects. The operating expense ratio then removes running costs as a share of that effective figure, leaving net operating income. Dividing NOI by the facility price gives the cap rate. Each stage appears as its own row in the results, so the arithmetic can be followed from gross rent to the final percentage. The Cap Rate at Full Occupancy row shows the ceiling: the same facility with every unit let at the average rent. The gap between it and the headline figure (11.70% against 9.95% at the sample inputs) is exactly the drag of the occupancy assumption.

What moves the number most

Units, rent and occupancy all enter the revenue line multiplicatively, so a 10% change in any one of them moves the cap rate by 10% of its current value: ±0.99 percentage points at the sample 9.95%. Price is inverse, so its effect is asymmetric: a 10% cheaper facility raises the result by about 11.1% of the base (+1.105 points at the sample), while a 10% dearer one lowers it by about 9.1% (−0.904). Per percentage point, the two operating levers depend on where the inputs sit: a point of expense ratio moves the result by the cap rate divided by (100 minus the ratio), and a point of occupancy by the cap rate divided by the occupancy. The expense ratio is the stronger of the two whenever occupancy plus expense ratio exceeds 100, which holds at the sample figures (85 + 35, giving 0.153 against 0.117 points per point); the two are exactly equal when the sum is 100, and below that line the occupancy lever is the larger one.

What the sector context looks like

Self-storage is often described in industry commentary as operationally simpler than residential property (no tenancy interiors to maintain, shorter agreements, and a high degree of automation in newer facilities), and cap rates cited for the sector typically sit above those cited for apartments. The trade-offs discussed alongside: exposure to oversupply where recent construction has been heavy, commodity-like pricing competition between nearby facilities, and a market in which large operators hold significant scale advantages in marketing and pricing systems. None of these enter the calculation; they bear on whether the input assumptions are achievable.

What this tool does not include

The output is an unlevered, property-level cap rate. Financing costs, cash actually invested, appreciation, tax, capital expenditure, and hold period are all outside the model. The Cash-on-Cash Return Calculator covers the levered view: the return on the cash actually put in.