Welcome to Step 2 of our content series, “How to Start a Self-Storage Business,” where we will dig into self-storage feasibility and how to choose the right property for your business. When choosing the property for your self-storage business, there are certainly a few things to consider. It’s important to do your due diligence and thoroughly research the property before deciding. Namely, you will want to take a good look at the location, the property type, and its potential for success.
Two of the most essential elements of a self-storage facility is that it is visible from the road and easily accessible. Think about how you can attract new customers from your location with your company logo on large, clear, and visible signage from the road. If the property is situated behind other buildings or structures, it may be difficult to see from the road. And if the property is in an unpopulated area, it will not get much drive-by traffic. A location that is close to residential areas, businesses, or other storage facilities can be helpful. You want your facility to be front-and-center whenever a potential customer is nearby. After all, convenience is key, and most people opt for a self-storage facility that is within about 5 miles of their home!
It is also important to choose a town where people use a lot of storage. To figure out the rental density of an area, there are a few steps to follow. First off, research the current self-storage facilities in your area. You can search online for self-storage facilities or use online directories such as SpareFoot or selfstorage.com to find a list of facilities in your area. Once you have a list of facilities, you can calculate the number of facilities per capita in your area. To do this, you will need to find the population of your area. Check with the U.S. Census Bureau’s website or search for the city or town’s population on Google.
Then, you just divide the number of rentable square feet in all the self-storage facilities in your area by the population to get the number of storage per capita. To find out average rentable square feet in the storage facilities in an area, find out how many units they have. Typically, each unit will be 100-150 square feet. For example, if there are 300,000 square feet of storage in your area and the population is 50,000, the number of storage square feet per capita would be 6. Compare the rental density per capita in your area to the national average. According to SpareFoot, the national average is approximately 6.1 square feet of self-storage space per person. You can use this number as a benchmark to figure out if the self-storage rental density in your area is low or high. For instance, if the number of facilities per capita in an area is significantly lower than the national average, it may show that there is a low self-storage rental density in that area.
There are several great resources to figure out the market metrics for a self-storage business’s feasibility. Inside Self Storage, Storage Pug, and Neighbor News for example.
You have options for your self-storage business: start from the ground-up or expand upon an existing facility. Empty lots are getting harder and harder to find, so it may be easier to find property with an established business. Either way, starting or expanding a self-storage facility is a lucrative business!
Pros and cons of an empty lot:
- With an empty lot, you can design and build a storage facility that meets your specific needs and preferences.
- You have the flexibility to customize your marketing and branding to your liking. You can build the brand image from the ground up, rather than choosing to either rebrand or inherit a potentially mismanaged brand with bad reviews, etc.
- It can be expensive and time-consuming to start a self-storage business from the ground-up.
- You will need to go through the process of obtaining permits and approvals for construction and operation.
- With an empty lot scenario, it may take time to build up your customer base and prove your business in the market.
Pros and cons of an existing facility:
- An existing facility will have established customer base and brand recognition.
- You may already have existing infrastructure and equipment in place, which can save time and money.
- Existing facilities can potentially generate revenue from day one of ownership.
- You may be limited in terms of layout and design changes to the facility.
- The current location may not be ideal for your target market.
A feasibility study is a critical step when starting a self-storage business, as it can help figure out the potential success of a self-storage business and identify any potential challenges that may arise. Plus, this study can help mitigate risks and increase the chances of success for the business. It can help you find an ideal location, size, and layout for your self-storage facility. Additionally, a feasibility study will help show the startup costs, ongoing expenses, and potential revenue streams of the business. This information is crucial in figuring out the financial viability of the business and whether it will generate a profit overall. Here are a few questions to ask: Where can I fit storage units? What is my property type? What is the best mix of storage sizes? How should the traffic flow? Who are my tenants? Feasibility studies can help you find the best location, size, and layout of your self-storage facility.
In the case of a self-storage business, a feasibility study can help decide whether there is a demand for such a business in the area, the size of the potential market, and the competition. It’s so important to look at your local competition and demographics. What kinds of things are the people in your community putting into storage? Find out what size units will do well in your area. Identify the location, size, rental rates, occupancy, and other details of your competitors. This can help dictate your unit mix, features, and prices, for example.
When researching the local competition, be sure to make a list of the self-storage businesses in your local area by using a local directory or online search. Visit competitors’ websites to see what products they offer. What are their price points, unique features, or current promotions? Tour local facilities for an idea of the size and quality of their units, as well as their cleanliness and security features. Read customer reviews of your competitors on Google, Yelp, or Facebook for a sign of satisfaction and customer service gaps. It’s important to note: you can conduct a feasibility study on your own or hire a company to help.
In addition to researching location, property type, and project feasibility, it’s time to begin your research on zoning, security, utilities, and environmental factors:
Zoning: Check the local zoning laws and regulations to ensure that the property is zoned for self-storage use. Some areas may have restrictions on the size or number of units you can build.
Security: Choose a property that can be secured easily with fencing, gates, and surveillance cameras. The security features you install will help attract customers and keep their belongings safe.
Utilities: Make sure that the property has access to electricity, water, and sewer services. You may also want to consider the availability of internet and phone services for your office.
Environmental factors: Be aware of any environmental issues that may affect the property, such as potential flooding, hazardous waste, or noise pollution. These factors can affect the usability and value of the property.
Permits: Begin to understand the necessary permits (and timeline/deadlines to buy them), including building permits, environmental permits, and other permits required by your local government. Also learn about regulations for setbacks, easements, landscaping, signs, and traffic impact, etc.
Overall, it’s important to do your due diligence and thoroughly research properties before deciding. Consult with real estate professionals, local zoning officials, and other experts to ensure that you choose the right property for your self-storage business. If the property is a workable candidate based on the criteria above, it is time to prepare an offer.
When starting a self-storage business, the easiest and most cost-effective choices can be the most solid. The future of storage is looking good, and it feels like it’s going to continue to grow. Whether you do the research yourself or get some help from industry experts, the more information you gather, the better prepared you’ll be. We hope you enjoy our content series on, “How to Start a Self-Storage Business.” Look for more information in our next post on financing and purchasing your property. In no time, your site will be transformed into a revenue-generating storage business!
At the core, Boxwell uses a hands-on approach to business that is carried throughout everything we do. When we need to talk, we pick up the phone. If there are questions, we demo our product. And when we’re intrigued with something new, we try it. If a team member needs help, we offer it. When our community needs support, we lend our resources. With compassion and innovative ways of “thinking outside of the box,” anything is possible. That’s our culture.
When building Boxwell, Rod Bolls set out to create a company that prioritizes a balance between working hard and playing hard. He aligns a strong business model with a strong team and a sustainable work environment. To achieve an ideal company culture, Rod nurtures every relationship. For example, this includes customers, partners, vendors, local non-profits, neighborhood sports teams, and museums. Our products include drive-up self-storage units, relocatable self-storage units, portable storage containers, moving containers, and restoration containers.
Boxwell units can help you increase your business’ revenue-generating space with units in a variety of sizes, including our new 10 x 20 units and our 8 x 20 units. Our portable containers and relocatable self-storage units are flexible, stackable, and beautiful! Boxwell is here to ensure that our products help you achieve your business goals.
Check out www.boxwell.co or call (303) 317-5850 today!