Developing a new self-storage facility and buying an existing facility are two different strategies for investing in the self-storage industry, each with its own advantages and disadvantages. Developing a new self-storage facility:
Building a new facility allows investors to create a facility that is tailored to their specific needs and the needs of their target market.
Developing a new facility in a new location can help investors tap into untapped markets and increase their revenue potential.
New facilities are often more energy efficient and have modern amenities that can attract renters.
Developing a new self-storage facility can be a significant investment, both in terms of money and time.
The process of obtaining all the necessary permits and approvals can be complex and time-consuming.
The construction process can also be risky and subject to delays or cost overruns.
Buying an existing facility:
Buying an existing facility can be less expensive than developing a new one, and it can be a quicker way to enter the self-storage industry.
An existing facility will usually have a proven track record of income and occupancy rates, which can be helpful in determining the potential profitability of the facility.
Buying an existing facility can also help investors to tap into an established customer base and revenue stream.
An existing facility may have outdated features or systems that will need to be upgraded or replaced in order to attract renters and increase income.
An existing facility may be located in an area with a saturated market, which can make it more difficult to increase income.
The process of buying an existing facility can be complex and time-consuming, and it may require the help of a real estate attorney.
Both strategies have their advantages and disadvantages, and the best approach will depend on the specific circumstances of the investor and the local real estate market. An investor should conduct thorough market research and consult with professionals before making a decision.