Don’t focus on just one factor when deciding on a Self-storage Site!

Don’t focus on just one factor when deciding on a Self-storage Site

When you are deciding on a site for a self-storage facility, you don’t want to rely on just one statistic. You might find that one statistic looks great while 4 others are telling you not to do it. You need to make sure that you look at a wide range of indicators when you are buying a self-storage facility or a potential self-storage site.

For example, if you just look at demand in an area and you decide that the demand has been met so you walk away. 6 months later, someone opens up a climate-controlled facility and it fills up completely in the first few months. You looked at the demand factors and noticed that the market was at full capacity. What you didn’t look at was the fact that there were no climate controlled self-storage units in the entire area. However, you were in an area where there was a demand for climate controlled self-storage. You have to look into each indicator as well as looking at multiple indicators.

Another example might be that you want to build in an area and there is an indication that there is demand for self-storage in the market. You build your new self-storage facility and charge the rents that you need to be able to make the self-storage facility profitable or at least break even and no one comes. What you didn’t check were the current market rates. The rates in that area were so low that no on is willing to pay enough to cover a construction loan and make the return on investment profitable.

Another example might be that rents are extremely high, and every property is fully occupied. What you didn’t check was to see what else was happening in that area. You go ahead and start construction on your facility. You are halfway through your project when you notice that two other self-storage facilities have gone up between you and your rental demographic. You are not out located by not one but two other self-storage facilities because you didn’t check with planning and zoning to see what was under consideration in that area,

There are so many things to consider when you are getting ready to buy a self-storage facility construction project. You need to make sure that you have a feasibility study done. As always, happy investing.