Self Storage- Building Quotes 05 2023

[Henry Clark]

We just built a 30 x 250 building last fall. Just have 3 units left in it now.  On the extra land at that site analyzing doing another 30 x 250 or a 40 x 250.  We don't have enough land to do Two 30 x 250's, thus this will be the last building we can build at this spot.  We have decided to go with the 40 x 250.  We prefer 30's since you can make 15/15 or 10/20 units.  But since the concrete road, security add-ons, and electrical will be basically the same for the 30 or 40 wide; plus, the land is already paid for, going with the 40's.  

Sticking with our same contractor and Building manufacturer.  My contractor is 87 years old and was helping pour concrete last week with his team.  If any of you need a job, call him; he would rather sit back and watch at this point.  Hard to find people.  Luckily, he is a go getter and has to have a project to get going; plus, he has a great team.

30 x 250 building        $94,330

Erection of building    $34,500

Concrete Slab              $49,500

Total                          $178,330

40 x 250 building      $110,978

Erection of Building  $46,000

Concrete slab             $66,000

Total                           $222,978

The above are not all of the costs.  Have about $3,000 to clean/level jobsite.  $50,000 for concrete roads.  $15,000 Electrical.  $15,000 security cameras; already have extra cameras so this will be around $5,000 to install.  Already own ground.  Permits are minimal.

With the 40 building at $222,978.  Total all in cost will be about $310,000.  Plus, some construction interest around $10,000.  So, $320,000.

100% occupancy at 50 units at $75= $45,000 per year.  Let's use 90%= $40,500.  

Property tax say $1,000

Insurance $500

Electric $300

Say net $38,000 before depreciation, interest and income taxes.  No management, since we run, buy you might add in.

Let's say $30,000 net cash flow.

Total cost $310,000/  $30,000= approx 10 year payback.  Fits with our 8-to-12-year payback on a 25-year term loan.

We would prefer this to be lower since we are not accounting for land and be down around 6 years.  But building costs have almost doubled in the last 3 years.  We could wait for material costs to go down, but these payback periods meet our financial targets.