How to Determine the Feasibility of any Market for Self Storage
Many steps are taken to determine the feasibility of investing in and/or building a self storage facility in any particular market. Between learning from prior investor’s mistakes and targeting the right markets to develop in, there is certainly a few obstacles to overcome when considering the upcoming necessary steps to take.
Take a look at this brief overview of what you need to do to discover the market feasibility for investing in self storage, along with the following steps you should consider taking, once you discover if this is the best financial move to make for your future.
Market Feasibility in the Self Storage Industry
Phases of Development
It is only natural for the development process, in any industry, to seem overwhelming – that’s just business. However, there are many costly mistakes that can be avoided by following the correct steps.
So what is the first step? Hire a professional who knows what they are doing. By hiring an insured expert to take care of the many phases of development for you, you are lowering your risk and increasing your return. Just keep in mind that a good developer will not cut corners, but instead pay close attention to detail to ensure the success of the facility, no matter what the standings are in your current market. This should also ensure the best site is chosen for you to start building your self storage facility.
Self Storage Customer Profile
Understanding your typical customer profile can go a long way towards the success of your new self storage investment. It is important to not only understand what it is that attracts customers, but the many little details that make them stay.
Take a look at the following key things that can make or break a new facility’s success:
- Visibility from the road
- Strong online presence
- Security (key pad entry control, security cameras, personalized codes, etc)
- Convenience in location
Also, it is important to understand the three market types and the differences between each market demographics way of life. Whether it be a primary market, secondary market, or tertiary market, do your due diligence in research to ensure the success of your new investment.
Market Feasibility Study
Once you understand the typical phases of self storage development, as well as, the typical customer profile, you can move forward with a market feasibility study. For the market feasibility study, you will need several tools and information such as mapping software, a demand multiplier, postal counts, demographics, etc.
The best way to do this is to bring in a self storage expert. Once you bring a professional onboard, they will assist you in performing a supply and demand study, followed by a full competitor analysis and economic feasibility study to justify the cost to develop and construct a facility.
Demand Analysis & Conclusion
Once you have completed your market feasibility study and discovered the square footage demand for self storage in your particular market, you are ready to find a site. Just keep in mind that what applies to one market can be very different to another and this is just one way to accomplish a market feasibility study.
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.
A market feasibility study, although sometimes tedious and strenuous, is the first and most essential step in the self storage development process. By allowing a professional to assist you in the development process, you are ultimately setting yourself up for success and will almost guarantee a bright future for your new business.