The self-storage industry is a booming enterprise and is one of the most low-risk business ventures you can invest in. In 2019 the industry revenue was $39.5 billion. That is a 49.4% increase from 2010. It sounds like a great business to jump into right? Even though owning a storage facility can be a pretty hands-off business, there is plenty to think about before taking the plunge. You might be debating if you want to build or buy. Each has its own set of pros and cons.
Before finding the perfect location, or deciding on purchasing one that already exists, it is a good idea to look at what the numbers of your startup will be. Your costs will vary based on your location, acquisition costs, as well as land and construction costs. Always keep in mind that your initial start-up costs will also need to include software and other tools that will help you run your facility. These costs will all depend on how you choose to buy or build.
Buying a Facility
Buying an existing facility can be very difficult to nail down the logistics into a blog such as this. Price varies depending on many different factors, such as location and demand. If the facility you are wanting to purchase is in a large city, it could cost millions of dollars. Whereas a storage facility in a rural area might be able to be purchased for less than a million. It is wise if you want to continue down this path to hiring a licensed real estate professional to help with understanding the market, and if prices are negotiable.
Before purchasing ask yourself:
Will I be running the facility? Is the facility in the area where I live?
Will I be hiring a third party or manager to run the daily tasks?
Will I use the same tools that the previous owner used, such as the management software? Or would I use my own?
If I want to make upgrades to the facility, how much room do I have in my budget for these costs?
Developing a Storage Facility
As most business ventures go, the location plays a big role in evaluating your costs. The self-storage industry has a pretty simple way to estimate these costs. You should expect to spend anywhere from $25 to $75 per square foot on new construction. This doesn’t mean that you will stay within that number. Your facility’s location will delegate the price tag.
There is a lot of thought and time that goes into a build. Some of these include:
What size will your units be? Are you looking to have a mixture of units at your facility? Depending on your build location, you may want to include anything from 5 x 5 geared towards renters to 10 x 20 geared towards homeowners.
Should your facility have climate control, no climate control, or a combination of the two? This decision will come down to your budget and the demographic you are catering to.
Should you leave space for RVs, boats, and vehicles? Again, this will play into what demographic you want to target.
What do zoning and entitlement look like where I want to build? How much time should I plan for the legal process and obtaining approval? These take both time and money. Bad weather, shortages, and limited labor can all delay your facility. When proceeding with the facility, find a seasoned legal team to assist in the paperwork and design process.
There is plenty to think about before proceeding to buy or build a self-storage facility. At Easy Storage Solutions, we are happy to help discuss the ins and out of starting your self-storage facility. Feel free to reach out to us for further information by contacting us.
