How to

Cost To Build Self Storage – Mako Steel

Introduction

When considering investing in self storage facilities, one of the first questions that often comes to mind is the cost involved in building them. While it may seem like a straightforward query, there are numerous variables that make it challenging to provide a simple answer. Factors such as location, design, zoning restrictions, and site improvements can significantly impact the costs of constructing a self-storage facility. Instead of focusing solely on cost, a better approach is to ask, “How much do I need to invest, and what research do I need to conduct to ensure profitability in a new self storage business?” In this article, we will provide high-level insights into the cost of building self storage facilities, while also emphasizing the importance of expertise, authority, credibility, and experience (E-E-A-T) in making informed decisions.

Factors Affecting Land Costs

In the past, it was commonly advised that land costs should make up around 25-30 percent of total development costs. However, this rule of thumb no longer holds true due to the numerous dynamic factors and market-specific parameters at play. The key to ensuring profitability in today’s development climate lies in conducting a thorough feasibility analysis that takes into account the market’s capacity and rental rates based on the type of self-storage and unit mix. By aligning land costs with market expectations, developers can make informed decisions and set appropriate pricing that supports their business goals.

Understanding Self Storage Construction Costs

To provide a ballpark estimate of construction costs, it’s important to differentiate between single story and multi-story facilities:

Costs for Single Story Self Storage Construction

Typically range between $50-$65 per square foot, excluding land and site improvement costs.

Multi-Story Self Storage Building Costs

Have more variables and can range from $85 per square foot to as much as $110 per square foot. With the availability of unlimited design options, it’s now possible to create self-storage facilities that seamlessly blend into their surroundings. However, the architectural details, finishes, land costs, and site improvements will also impact the initial investment.

Factors Influencing Profitability

Successful self-storage facilities need time to reach their full income potential, especially in competitive markets. It often takes 18-24 months to achieve maximum profitability. To ensure long-term success, consider the following steps:

1. Locate a Property

Choose a prime location that meets the specific requirements of your target market. Conduct a comprehensive assessment of the market’s capacity to determine the feasibility of your self storage project.

2. Complete a Market Analysis

Gain a deep understanding of your competition, occupancy potential, and any unique demands from your market, such as climate-controlled self storage or boat and RV storage. Collaborate with industry professionals to conduct a comprehensive feasibility study.

3. Calculate Your ROI

Compile competitive and demographic information, along with estimated start-up and operational costs, on a spreadsheet. Ensure that the numbers demonstrate your ability to generate the revenue and profit needed for a successful venture.

4. Contract an Architect

Engage an architect who can factor in your location’s specific requirements and incorporate them into the building design.

5. Create a Construction Budget

Partner with a professional self-storage building company to develop a site plan and obtain a comprehensive estimate for construction costs.

6. Secure Financing and Purchase

Explore financing options with companies like MakoRabco, who specialize in loans for self-storage projects.

7. Pull Building Permits

Navigate through the necessary steps and regulations to acquire building permits for your self-storage facility.

8. Build

Choose a professional self-storage construction company that understands the unique needs of the industry and has a track record of successful projects.

9. Market

Establish a strong online presence through a website, online marketing, and advertising. Consider joining your local state self-storage association to network with industry professionals and showcase your facility.

10. Enjoy the Rewards

With proper planning, execution, and the expertise of industry professionals, a profitable self-storage facility is well within reach. MakoRabco, with over 20 years of experience in the industry, is here to provide guidance and support as you embark on this exciting venture.

By following these steps and leveraging the expertise and experience of professionals in the self-storage industry, you can confidently answer the question, “What does it cost to build self storage?”

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