Mistake No. 4: Not Phasing the Development
Here’s another mistake many first-time developers make: building the entire site at one time. In the last 10 years, more owners have opted to build their entire site at one time. Why? Common answers included, “I can get the money, so why not now?” or “My pro forma looks better.” And for those who struggled through the city-approval process: “I never want to talk to the city ever again.”
Today, we’re seeing the consequences of all these 60,000-square-foot or more facilities built at one time. They take a long time to rent up, particularly if there’s plenty of nearby competition.
Owners often forget self-storage facilities only rent 1,500 to 2,500 square feet per month even in a good economy. These owners were delusional about how fast their facilities would fill.
Phasing a site minimizes the downside (loan amount) and offers the greatest flexibility to fix mistake No. 2—building the wrong size units for the marketplace. Each market is different, but later phases are your opportunity to fine tune your unit mix and build what customers need.
Mistake No. 5: Not Being Ready for Business
The last mistake often made by many new self-storage operators is not being 100 percent ready on opening day. You should begin preparing to rent units long before you actually pull your occupancy permit. The list of items that should be addressed is plentiful and includes:
Website. Have your facility website up and running early. Look at all your options for driving people to your website or get connected to one of the many companies specializing in getting you leads.
Software. Pick out a software system early, know how to use it, and start reserving spaces as soon as it’s operating.
Advertising. Secure your ad in the Yellow Pages before you start construction. You should also consider online advertising opportunities, as more customers are turning to the Internet to find self-storage.
Phone sales. Answer the phone before your facility opens. While tenants cannot move in today, they can reserve a unit, or ask about pricing, unit sizes and amenities.
By avoiding the common mistakes above, you’ll attract more tenants, and be successful in developing a quality self-storage facility that will have minimal problems.
Jamie Lindau is the national sales manager for Trachte Building Systems in Sun Prairie, Wis. Lindau has crisscrossed the United States and Canada for 23 years helping people plan, develop, build and profit from self-storage. Drawing from his own experiences as a former self-storage owner, he has also led more than 200 Trachte seminars since 1988. For more information, call 800.356.5824; visit www.trachte.com.