To determine the feasibility of investing in or building a self-storage facility, many steps need to first be taken. Learning from prior investor’s mistakes and targeting the correct markets to develop in are just a couple of the obstacles that need to be overcome when you begin to consider the first necessary steps to take.
With this small overview, you should get a clear picture of what needs to be done to discover the market feasibility for investing in self-storage. You will also consider the steps that should be taken once you decide if this is the financial move you want to make for your future.
Stages of Development
Don’t be surprised if the development process seems overwhelming. This is natural in ANY industry, not just self-storage. There are, though, many costly mistakes that can be side stepped if you are following the correct steps.
Step one is to hire a professional who knows the ins and outs of the business. This will lower your risk and raise your return. Why? Because they are an insured expert. Involving them in the different stages of development will make sure that the attention to detail is there and that no corners are cut, regardless of what the current market is like. Having a hired profession will also ensure that the perfect site has been chosen for the building of your self-storage facility.
The profile of a self-storage customer
If you understand the customer profile of the people you are marketing to, it will go quite a ways to the success of your new development. Not only do you need to understand WHAT attract customers, you also need to observe the tiniest of details that cause them to stay customers. Here are some key variables that can make or break your success:
- Visibility from the road
- Strong online presence
- Security (key pad entry control, security cameras, personalized codes, etc)
- Convenience in location
It’s also important to note the three market types and what the different way of life between them mean. Regardless of if it is a primary market, secondary market, or tertiary market, doing your due diligence when it comes to research will ensure your success.
Market Feasibility Study
As soon as you have identified and understand the usual phases of development and the customer profile, you can move on to the market feasibility study. There are a few pieces of information and tools that you will need to accomplish this. Mapping software, a demand multiplier, postal counts, demographics, and the like.
Again, it is wise to bring in a self-storage expert (like me!). A professional on your team will assist in preforming a supply and demand study. They will then follow that up with a competitor analysis and economic feasibility study. These will justify the cost to develop and construct your facility.
After you have finished with the market feasibility study and settled on the square footage you will be requiring in your market, you will be ready to find the best site to begin building. Keep in mind how quickly things change and how what works in one market can be very different in another. What has been laid out above is just one way to accomplish the market feasibility study.
Don’t try to cut corners and do it all on your own! Be sure to follow the appropriate steps and bring on whatever professionals may be required. Take advantage of their knowledge and experience. This will ensure that all is done correctly and timely.
As an entrepreneur you may be inclined to cut corners and do this on your own, however, we highly recommend following the appropriate steps and bringing on a professional to take advantage of their self-storage experience and to ensure all of the necessary development steps are completed correctly.