Cut the crap. How do I get into the self storage business?
"How do you get started in self storage?"
That's by far the most common question I get.
And for good reason.
Self storage has gotten a lot of attention the last few years. The flood of institutional capital into self storage, combined with the rise of the REITs (publicly traded self storage companies, like Public Storage and Extra Space) and investor sentiment has put the spotlight on self storage.
It seems everyone knows someone who owns or has invested in self storage and is making better returns than alternative investments, leading them to wonder, how can they get started in self storage?
If you're starting from scratch, below is a rough overview of the process. As always, if you want to talk through a potential project, please email me at firstname.lastname@example.org or call/text me at 801 839 5844.
Alright, here we go.
Research the market: Determine the demand for self storage in the area you are considering, and research the competition to see what types of facilities and services they offer. This will help you understand the market and identify potential opportunities or challenges. Common methods for determining demand include calculating self storage square feet per capita and comparing it to regional and national figures, and calculating what percentage of households use storage compared to regional and national figures.
Find a suitable location: Look for a location that is easily accessible and visible to potential customers. This could be near a busy road or in a highly populated area.
Choose a facility size and layout: Decide on the size and layout of the facility based on the needs of your target market. Consider factors such as the types of storage units you will offer, the number of units, and any additional features or amenities you want to include.
Secure financing: Determine how you will finance the project, whether through loans, investors, or other means. This may require creating a business plan and presenting it to potential lenders or investors.
Obtain the necessary permits and licenses: Check with local authorities to see what permits and licenses are required to operate a self storage facility in your area. This may include zoning permits, building permits, and business licenses.
Purchase the property: Once you have found a suitable location and secured financing, you can either purchase or lease the property. Consider factors such as the cost, terms of the agreement, and any potential risks or liabilities.
Build or renovate the facility: If the property needs to be built or renovated, work with architects, contractors, and other professionals to get the facility ready for operation. This may include designing the layout, choosing materials, and obtaining any necessary building permits.
Market and promote the facility: Develop a marketing and promotion plan to attract customers to your facility. This may include creating a website, advertising in local publications, and offering promotions or discounts to new customers.
Do you need help determining how much demand for storage is in your market? Do you have a site in mind and need help figuring out what returns you should expect? Do you need help formulating an ideal unit mix and asking rents? Box Pro can help!