Property Vs Self Storage

Good Morning, Store Nation,

Sorry there hasn’t been any newsletters this week …. It’s tough juggling kids on the school hols

I’ll try and do better next week 🤞🙏

The 5 Year Exit Numbers (The Gap Is Staggering)

Over the last two days, I've walked you through the ROI and Cash on Cash comparisons between my property investor friend and my self storage facility.

If you missed those emails, don't worry — I'll give you all the context you need right here.

Today, we're looking at the big one — what could you actually sell for after 5 years, and what does the total profit picture look like when you add everything up?

And just to be clear upfront — I'm going to be deliberately generous with the property numbers here.

Where there's a range, I'm always going to use the highest figure. That way, nobody can say I'm being unfair. 😊

My Friend's Property After 5 Years:

My friend is a professional property investor who bought 

A distressed property for £53,000, 

Spent £10,000 doing it up 

Paid £2,000 in fees

Total investment of £65,000. 

The property is currently worth £95,000 after 4 years and generates £575 per month in rent.

Using the ONS UK House Price Index as our benchmark, UK property has historically grown at between 3% and 5% per year over the long term. I'm using 5% — the absolute top end — to give the property every possible advantage here.

At 5% annual growth from £95,000, his property would be worth around £121,300 after 5 years.

Here's the full profit picture:

• Sale value: £121,300

• Original investment: £65,000

• Profit on sale: £56,300

• 5 years rental income: £34,500 (£6,900 x 5)

• Total profit after 5 years: £90,800

And look, that's a genuinely solid result. My friend is good at what he does, and £90,800 total profit on a £65,000 investment over 5 years is nothing to sniff at.

Sources: ONS Average House Price Data | UK House Price Index | HM Land Registry

My Self Storage Site After 5 Years:

Here's how the annual profit looks year by year as the site fills up and matures:

• Year 1: £3,824

• Year 2: £49,032

• Year 3: £125,571

• Year 4: £209,567

• Year 5: £303,587

• Total profit over 5 years: £691,582 

Now here's where it gets really interesting. Self storage sites typically sell for between 3x and 5x annual profit. With year 5 profit sitting at £303,587, that gives a sale value of somewhere between £910,000 and £1,520,000.

Here's the full profit picture using both ends of that range:

At 3x sale value:

• Sale value: £910,000

• 5 years profit: £691,582

• Total profit after 5 years: £1,601,582

At 5x sale value:

• Sale value: £1,520,000

• 5 years profit: £691,582

• Total profit after 5 years: £2,211,582

So even at the most conservative self storage valuation, the total profit after 5 years is £1,601,582 compared to the property's £90,800.

That's roughly 17 times more profit. On the high end, it's closer to 24 times.

And remember — I used the absolute top end of property growth figures to make this as fair as possible. Even being maximally generous to property, self storage wins by a country mile.

This is exactly why my friend — a professional property investor who is very good at what he does — is now seriously looking at opening his own self storage site.

£90,800 versus £1,601,582. On the conservative end. Being maximally generous to property. That's not a comparison anymore — that's a different game entirely.

If you've been sitting on the fence about self storage, I hope this series has given you something to think about.

PS. Want to see how these numbers could work for your own site? My free training breaks it all down.

Watch it here: https://www.mrselfstorage.com/self-storage-investing-academy

Loads of self storage love,

Dean ❤️ 🙃