Tips for Performing Self-Storage Market Research
Investing in a self-storage facility is a big decision, requiring significant amounts of time and money. Before you make that investment, you want to be sure there’s room in the market for your facility. Performing self-storage market research will help you determine whether your self-storage property will be successful.
How Do You Do a Self-Storage Market Analysis?
Follow these steps to perform self-storage market research:
- Define your trade area: Your trade area is the geographic radius from which your facility gets most of its customers. Most suburban properties have a trade area of about three miles, while dense city areas may have a trade area of only one mile.
- Survey all the facilities within your trade area: Gather relevant information like the number of units, occupancy rates and net rentable area. You can use estimates from sources like public records, the assessor’s office and phone surveys.
- Determine demand: Some of the main factors that influence the demand for self-storage in a given trade area include population, number of renters, average household size and annual household income.
- Determine supply: Evaluate whether the market is under-supplied (the supply is less than the demand), over-supplied (the supply is greater than the demand) or average. Generally speaking, under-supplied markets have unit occupancy rates of over 90%, over-supplied markets have rates less than 80% and average markets have occupancy rates between 80% to 90%.
Self-Storage Market Research Tips
Keep these tips in mind as you conduct your self-storage market analysis:
- Understand how the trade area was defined: Ensure you included physical structures like airports, major roadways or rivers in the trade area, as these barriers affect customers’ ability to find and rent at your facility.
- Use local information: Use information from the property area rather than just national averages and online data to generate the most accurate analysis.
- Remember it’s not an exact science: Keep in mind that while your self-storage market research may not be exact, it can still help predict how your facility will perform in that market.
- Know what’s required: When it’s time to get a loan, some banks will want to see your market research analysis. Be sure you know what the bank needs ahead of time so you can include it in your report.
Get a Self-Storage Market Analysis From the Experts at Investment Real Estate, LLC
Leave your market research to the experts at IRE. We’re a top self-storage real estate agency in the mid-Atlantic and Northeast. Our team provides unbiased third-party verification for proposed self-storage projects to eliminate speculation and help you make the right decision.
Get in touch with us today to learn more about our market research services.
