According to the Self Storage Association, self-storage businesses earned $24 billion in revenues in 2013. Generating income from this type of project means more than offering enclosed spaces for customers' belongings. Your choices of location, equipment and staff will influence the business' success.
Finding Your Place
Find places with people who need your service. The SelfStorages website recommends that the population within 3 miles of your proposed facility be 50,000. Communities with military bases, apartments, duplexes, condominiums and houses without basements also make good candidates. Military personnel in communities adjacent to bases rent between 20 percent and 90 percent of the units. SelfStorages suggests you consider a location passed by at least 25,000 cars per day, because most customers choose a place they spot while driving. The Self Storage Association advises against locating along freeways; a major street or road that passes by a neighborhood to be served makes a better spot.
According to the Self Storage Association, land generally accounts for 25 to 30 percent of the business's development costs. An appraiser, property tax value or prior sales of the land you want can give you an idea of the land's value and what you might consider paying for it. The local property tax office can help you find sales of comparable land. Before you buy the land, check with the local government's zoning office to determine if and under what conditions a self-storage facility is permitted. You will need to get the property rezoned if the current designation for the property does not allow a self-storage facility.
Level of Construction
The Self Storage Association reports that a typical facility occupies 2.5 to 5 acres. Facilities with security systems, climate control and other state-of-the-art features typically have 60,000 to 80,000 square feet of net rentable space and cost between $45 and $60 per square foot to build. A multistory facility can help you fit more units into limited spaces and acreage. MakoSteel reports that constructing a multistory facility costs between $42 and $70 per square foot, compared with $25 to $40 per square foot for a single-story facility. Those numbers don't include the cost of buying land.
Customers expect your facility to guard their possessions. Typical security measures include electronically controlled entry gates, lights, video surveillance and on-site managers. For 24-hour human supervision of the site, you will need a resident manager. Install a dehumidifier to protect your customers' property from mold and other damage associated with moisture.
- Self Storage Association: About SSA -- Fact Sheet
- Self Storage Association: An Introduction to Self-Storage
- Inside Self Storage; Looking to Build Your First Self-Storage Facility? Read These Insights First; Jaime Lindau
- SelfStorages: How to Buy a Self-Storage Facility Properly
- Mako Steel: What Does It Cost to Build Self-Storage?
- Storage: Secure Self Storage
Christopher Raines enjoys sharing his knowledge of business, financial matters and the law. He earned his business administration and law degrees from the University of North Carolina at Chapel Hill. As a lawyer since August 1996, Raines has handled cases involving business, consumer and other areas of the law.