Price Per Acre For Vacant Land For A Self Storage Business?
I had a real estate agent recently tell me that vacant land should be bought for around 60k per acre to be profitable in starting up a self storage business from scratch. Problem is, is that all the land I can find that looks appealing for self storage is way over that price. Do you agree with this figure?
Also, what would you suggest as the minimum amount of land required to start a self storage business? This is taking into account "not" having any RV, Car or boat storage...just small to medium size units available.
I have found a perfect location commercial piece of property that is only 3/4 of an acre which includes a 2,400 sq. ft building on it. I figured keeping 1/4 of the building for an office and tearing down the rest to make way for more units. Problem being the asking price is 300k, which I realize is out of the question and that this owner should be prepared to take much less. The best part being he is retired and wants only 25k down and the remainder made in monthly payments with only a yearly cost of living adjustment in place of interest.
Questions: Would you attempt to buy it for this purpose and if so at what offer? The land is flat and almost perfectly square, so would you venture to guess how many units would fit and if it could be profitable on only 3/4 of an acre? Thank you.
Get an architect to map it out or do it yourself using another storage unit complex as a template for space between units.
After you have mapped it out you can start to figure out what your income might be.
The owner financing sounds pretty sweet. (i.e. 3% cost of living for interest). It almost sounds like you could talk him down if you find some comps that show his price is high.
Good luck.
I looked into self storage a couple of years ago for some property that I owned. Never did it , but found this company "Trachte" very helpful. They sell the buildings, but also provided much help in other questions that I had. Give them a call and I am sure all your questions would be answered. Good Luck
I build / develop self storage in NJ / NY / PA regions from Urban to Suburban markets.
Your best bet is to drive around and check out other self storage buildings in the area. Try asking the management the occupancy rating and if possible ask to take a walk to check out the site (say you are interested in renting a unit for your business and want to check on the security / layout issues). This will give you a feel of the storage bin ratio and expected occupancy. Then you can back in the occupancy rating you will need to make the deal work and layout your basic storage bin layouts. Everything else is just code issues (hallway size requirements) etc... Once you determine the number of bins required you can get a basic size of building to conform to the zoning requirements for the land.
Dennis [ Edited by commercialking on Date 10/05/2006 ]