Self-storage investing is on the rise in Arizona. According to a recent report by AZ Big Media, the past five years have been a boon to this industry and now it’s flourishing. The growth rate has only gone up during the recent pandemic, too. The valley currently has a self-storage vacancy rate of around 4.6%, further highlighting the demand for this service.
During last year, Arizona’s real estate activity overall increased by a staggering 35%, with self-storage property activity rising by an impressive 19%. With an estimated $11 billion being invested directly into self-storage portfolios, it’s important to remember why you want an experienced attorney on your side before you dive into investing in Arizona self-storage real estate.
Litigation Can Happen
For many operators of self-storage units, the risk of litigation isn’t pressing and is not that common. But that doesn’t mean that your business or assets are immune to a lawsuit. More frequently, a lawyer’s job will be to help you create partnership agreements, contracts and implement a process that helps you prevent litigation in the first place. Of course, they are there to help with self-storage litigation if it arises. Moreover, real estate lawyers help you do the one most important thing you can do with any investment portfolio: plan ahead.
Finding an Attorney
It’s best to consider your decision to work with an Arizona real estate attorney on your self-storage portfolio as a cooperative effort. Before you have your consultation with any law firm or attorney that you are considering using, make sure you create a facts statement of your current situation. This can include a list of events or a summary of your business’ history. Make sure to keep this summary short and simple, and also make sure that you list these events in chronological order.
Be certain that your attorney is aware of any other factors that may be pertinent to your business dealings. Let them know how often you’d like to receive updates, and what type of details you’d like these updates to entail. Keeping your attorney well-informed can help you stay a step ahead with your self-storage investment.
Understanding Your Liability
Your lawyer will be able to better help you understand your liability and risks from the get-go. Using their experience, they will carefully determine the language of any contracts that you need. The goal is to reduce your liability and ensure that you have the means necessary to properly run your self-storage business.
There are many aspects of a storage agreement that are very unique, so it is important to work with an attorney who is aware of the problems that often arise in self-storage businesses. Most importantly, many of these issues can be avoided by simply adding terms and provisions to your storage contract that ensure both you and your customers know what to expect from one another.
For example, the storage of gasoline containers within a storage unit can quickly become problematic but is something a first-time storage operator might not have even considered including restrictions for in their contract.
Maintenance issues are another instance that can take owners by surprise and become very problematic without a proper contract to safeguard the owner’s interest and streamline the process by which customers will be billed for damage they’ve caused or compensated for damage sustained their property in storage. For instance, imagine if a fire sprinkler in a storage unit began leaking. Without a contract that covered how to proceed in this type of situation, an owner might not have the right to check the units to find out which one is leaking. Even more of a headache, there wouldn’t be an agreed upon process for how the owner can carry out the necessary repairs and compensate the customer for any water damage to the property stored in the unit with the leaking fire sprinkler.
Not to mention, there are many other scenarios that can bring about questions of liability such as theft, unpaid rents, and law enforcement intervention just to name a few.
Lastly, like any type of rental, this can sometimes mean that you have to evict certain tenants.
In these instances, you can be assured that having proper legal counsel on your side is a priceless commodity to prepare you for situations you might have not considered and to protect your interests in situations that are truly unforeseen.
Work With the Leading Arizona Real Estate Law Firm
Investing in a self-storage business can be lucrative, but it’s not without its risks, either. The right attorney can help you minimize these risks in advance.
The attorneys at M&G assist our clients with all types of real estate issues, including self-storage investments. We can review your current situation and portfolio to assess the best course of action.
Contact us today at 602-726-2229 to schedule an initial consultation or make an appointment online on our contact us page.