Tips for Performing Self-Storage Market Research

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.

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