Evaluating Your Potential Conversion for Profitability Part 2!

Finding a potential property for a self-storage conversion is exciting. As we have discussed, there are a number of things that you need to evaluate prior to purchasing the property. The three that we are going to cover today are the lighting, the loads and watching the cost of renovations. Each of these is important to your project.

When you are determining your lighting, think about who is coming to your storage facility. These days there are a lot of women coming to your self-storage facility. They are doing the loading and the unloading, and you not only want them to have easy access to their storage unit, but you also want them to feel safe. If you have a large facility, you can help bring the unit closer to your renter by providing rolling carts for your clients. This way they can unload at their car onto the cart and then unload at their storage unit.

One way that you can help your renters feel safe is the lighting. When you design the lighting, make sure that you design it so that the lights are on a timed motion-sensor. This way you don’t have lights on when they don’t need to be, but they are there when someone needs them. Second, don’t ever put a bulb inside a unit, how will you change it if it goes out? Finally, if you have a dead end, put in a window. It makes people more comfortable.

If you are looking at an office building, bear in mind that most office building cannot support the weight that you are going to be putting on them. You need to check the floor loads. Office buildings are designed with an 80lb per square foot limit. Self-storage needs at least 125lbs per sq. ft. Typically you need 8 inch concrete floors to make your load limits work. Load limits aren’t always a deal killer. Your contractor can strengthen the floors to make it works, but it is a significant additional expense.

The cost of renovations can be higher than the cost of your purchase. This is why it is so important to find out what they are going to be prior to purchasing the land/building. You need to know if it is going to cost $2 a square foot for the land and $200 a square foot to fix it up. That may or may not work, depending on what the rents are in the area. The goal in a conversion is that you can do it for less money, faster. Get your bids prior to closing and make sure that your numbers work.

Conversions are a great way to find self-storage properties, often for less money than up and running self-storage facilities. Be creative when you look for self-storage conversions, but make sure you look for all the little things that can prevent your project from moving forward. We have only covered a few of the big things, ask your team for input so you don’t miss the little things. As always, happy investing.