Tips and Tricks for Converting a Property into Self-Storage

Sometimes, you have combed an entire market tirelessly only to discover that there aren’t any owners who are willing to sell today, or that there are just not enough self-storage facilities to meet demand. Instead, you have found a few locations that are perfect for new construction or a great location that would make a great conversion. There are a few due diligence items that you want to make sure you check before you buy the property.

First of all, conversions are a great way to get a new self-storage facility. You have to do your due diligence and make sure that the cost of cleanup works within your numbers. Sometimes, old factories, can leave hazards that costs millions to clean up. You need to make sure that there aren’t any environmental hazards.

The second thing to double check is the soil. Can the soil be built on? You need to check the water table to make sure that it isn’t too high. You also need to double check that it isn’t an old trash dump site. This would also make the soil unstable. Don’t skip getting the soil tested as one of your due diligence steps.

One of the biggest obstacles to converting an existing building is planning and zoning. There are a few reasons for this. First of all, the city is probably going to lose income. If you are converting a building that used to employ hundreds of people and now it will only employ 1 to 3 people, that is a loss of income for the city. Even though you are there right now and ready to take care of that ugly building, some planning and zoning commissions may hold out hope that another retail investor will come along and decide they want the spot. Ideally this would provide more tax revenue and jobs.

Your job is to make sure that you meet all of the city’s requirements as professionally and quickly as possible. However, there is one unpredictable part of the process. This is working with the neighbors in the neighborhood. One of the things that you want to do is hold neighborhood meetings and show them that you are the best option for that spot. Let them know what kinds of properties the area is zoned for. Tell them what other types of properties could be going into that location instead of a nice quiet self-storage facility.

Hold neighborhood meetings to answer questions and overcome objections before you attend the city meeting. This will help overcome a lot of the fear associated with change before you go to the city. We will discuss this in more detail in our next blog. As always, happy investing.