When it comes to owning your own self-storage business, one of the most attractive features is the low amount of ongoing capital expenses. Storage units don’t need to be staged, appliances aren’t needed, and there are relatively minimal ongoing maintenance needs.
However, there are several important factors you’ll need to consider when planning your budget — especially in today’s market, where costs are changing daily. In addition to miscellaneous costs, like those associated with obtaining permits and water & sewer taps, your biggest costs will likely fall into two categories: land costs & building costs.
The rule of thumb for land cost is approximately 25-30 percent of total development costs. If land costs $1.25 per gross square foot, and one assumes a 40 percent coverage, the net cost for the land would then be $3.13 per rentable foot of the building.
Usually, the land use is maximized by developing multi-story self-storage with two or more stories.
The costs of building a self-storage facility typically range between $40-$60 per square foot for single-story units, not including land or site improvement costs.
Multi-story self-storage building costs have more variables and can range from $70 per square foot to as much as $90 per square foot. The architectural details and finishes can significantly impact cost, which is why it’s essential to work with a design-build contractor.
While it typically takes 18-24 months for many self-storage facilities to realize their full income potential in a competitive market, working with a qualified design-builder can help shorten this timeframe considerably. Additionally, a well-designed facility in a good location should command an occupancy rate up to 93%.
With the help of a quality design-builder, like Metrolina Builders, you can further reduce your costs by between 10 - 20%.