Self-storage has proven to be a lucrative business model and as a result, there has been increased interest in ownership. There are many great reasons that self-storage development and investment has been on an incline.
A few of the benefits include flexible hours with remote management options available, self-storage is a necessity for renters as the need for “stuff” continues to sky rocket and the demand for self-storage as a whole has been rising as well. The United States self-storage market is expected to register a compounded annual growth rate of 8% over the forecast period 2019-2024.
But if this venture is your first step into the industry, you will have many questions on where to get started. This blog series will provide the answers and the solutions to make your first storage facility a great experience and the following topics will be addressed in the series.
The Planning Process
At the start of the planning process you would benefit from outsourcing a feasibility study, then you would quote and select your engineer, architect and builder. Once your feasibility study has taken place and the land has been zoned accordingly your chosen vendor can begin to lead you through your project. When building a self-storage facility, it is most beneficial to have all of the self-storage solutions available through the same vendor, eliminating the need to juggle multiple builders. The planning process outlines your preliminary estimate for the overall project and that can be presented to a lender for financial support.
Financing a Self-storage Facility
An important step in starting your self storage construction project is securing a loan that will provide the monetary backing needed to turn your plan into a business. Most owners don’t have the cash on hand to kick start their new venture on their own, but there are other ways to gain financing. Financing options for first-time owners in the self-storage industry have been made easier with loans given by the Small Business Association (SBA).
While there are some SBA loans that require past industry performance and knowledge, there are offerings specifically for those new to the industry. Knowing the different types of loans, rates and terms will help you compare apples to apples and choose the right loan for your business.
There are two different studies that can be used to make an educated decision. The first is the feasibility study that is mentioned at the beginning of this process and the second is a market analysis. In general, a market analysis searches for the intersection of demand and supply that will create a market for a product at a given price, and a feasibility analysis tests whether a certain product will meet certain financial or social goals in the market. A few great resources for this kind of analysis would be Radius, Real Estate Solutions (REIS), and STR. The use of these two studies allow you to learn about your competition, community and future customers.
As we mentioned, each of these steps is important in the beginning stages of a self-storage facility and each topic will be covered in more detail in this blog series of How to Start a Self-Storage Facility. BETCO can help you through every stage of the process. We make your job easier by providing consultation, customization, drafting and design, manufacturing, installation and building.
Click here or the button below to see how BETCO helped Blue Hawk Investments overcome the challenges they faced when building their first ground-up self storage facility!