Building a Self-Storage Facility
The cost to build a self-storage facility is less than it is to build office or retail space, hotels, or multi-family dwellings. In most cases, the cost of construction, including land, and soft costs (commissions, financing, and costs for various consultants or professionals) is about one-third of the price for other real estate types.
Compared to buildings apartments, there is limited plumbing and electrical to install at a self-storage facility. The interior space is uniform, with specific unit sizes as opposed to residential floor plans. There is little dry walled, and finishing required.
There is a customization factor to consider, since oftentimes individual tenants require that the offices, they lease be reconfigured to suit their needs. But, in general, these factors make self-storage easier to develop.
Do your homework regarding where you should build and what you should charge per unit. You can get those competitive prices by visiting many other Self-Storage facilities withing 30-40 miles of where you want to build.
You need to build in a location with easy access and visibility. Advertising is key here. Large sign that will grab the attention of traffic.
Once a self-storage is built, it is much less labor intensive to operate and maintain. The staff is usually limited to you and an employee or two, or a manager or couple. You might also consider a part-time assistant manager.
The good news is the facility will generate the same rent per square foot as apartments. Specialty storage can bring in even higher rates. Self-storage facilities also have a lower rate of delinquency and rents can be pushed harder. When you initiate a 5 percent rate increase, the tenant would rather just pay the extra than move.
I go into much more details in my book on Amazon including Climate Control, Conversions. Plus, from the dream to opening day.
Basic Dry Storage Only•
Basic RV and Boat•
Condominium Style RV and Boat•
Mobile Self-Storage •
Chapter 2 - Should You Buy, Or Build? 21
Private Storage in Multi Family Buildings•
Combination Retail and Self-Storage•