Converting Existing Retail Space into Self-Storage in Phases!

The great thing about converting a property is that you don’t have to do it all in one phase. This can be cost prohibitive and can keep you from opening as quickly as possible. By opening in phases, you are able to start generating income faster and you can keep your initial costs down.

Depending on your financial situation, you may decide that you are going to wait to do phase 2 and 3 until you are fully occupied and have generated enough income that you feel comfortable starting the next phase. For example, if you buy a 100,000 square foot building, you could develop it in 4 phases.

However, when you develop in phases, you need to make sure that you do all of the dirty work in the first phase. You don’t want your property to look like it is closed and under construction for years. You will turn away potential renters. You want to complete all of the obvious things in the first phase of construction so that it looks complete even though it is not.

The roof is essential. You have to have a viable roof in order to rent to anyone. Don’t try to repair an old leaky roof, it is cost prohibitive. Instead, put a metal roof over the existing roof. Now you have a new roof that won’t leak and your building already looks better.

Make sure that you do the paving, sewer, and concrete in the first phase too. These are things that are going to make a mess. You want to get the messes out of the way before you invite renters to bring in their belongings.

Before you buy the property, you need to know what the conversion is going to cost. There is no way to know about any surprise hidden expenses, but you can budget for them. If the cost of converting the property doesn’t make sense financially, don’t buy the property. This is a very important part of your due diligence process if you are going to convert a property. If the property can’t support itself, you either need to offer less or walk away. As always, happy investing.