Real commercial development of self-storage units in Perth started in the late 1960s by people who recognised a growing demand for residential and commercial storage. These were the real-estate developers who ventured out and set the stage for the industry that we know today. The self-storage industry itself is no different than any other kind of industry if one compares supply-and-demand economics. As the demand for residential and commercial storage has increased, so has the need for facilities that supply it. Here are 7 self-storage occupancy affecting factors to look into.
1 -Adhering to Building Codes
With the occupancy classification for self-storage, a building more than three stories high is required to be fire-rated. This basically means that you’re not allowed to use light-gauge framing for construction purposes, as it’s too difficult and completely impractical to fire rate the entire building. The solution is to build a heavy-steel-frame building with long-span members and fire-spray-proof each member which supports the structure, or a complete concrete structure skeleton. In most cases, this is cost-prohibitive for the rent you’ll be able to effectively charge for the facility. This type of system has been used effectively to construct four-story buildings and, in a few limited cases, five-story ones.
2 – Project Budgeting
Budgeting for a multi-story facility can be a tall order and task and maybe in your best interests to be left to a seasoned professional. Considerations that should also be included in your budget are the construction of any special exterior or architectural features on the building and other extraordinary requirements. This should give you a rough starting guide with respect to all construction costs. Multi-storey construction can certainly be an exciting and rewarding development, but you have to remember that it does require careful consideration and the assistance of qualified professionals.
3 – Visibility and Signage
One of the most vital features of a multi-story building is that it creates its own signage. Due to this, it’s of the essence to construct the facility in such a manner that it’s not only attractive, but that it gets prospective tenants’ attention, and keeps in style with the surrounding scenery. Unless it’s prohibited by zoning laws or any other special requirement of the governing authority, next to most multi-story facilities feature large expanses of glass, displaying roll-up storage doors in the upper levels. These doors are normally highlighted at night with lights, thereby stealing the attention of passers-by. This definitely makes the building readily recognisable and memorable as a self-storage facility. This can be very effective even in spite of zoning requirements that may prohibit the project from appearing like a traditional self-storage facility, possibly even preventing unit doors from being visible at ground or street level.
4 – Financial Projections
The understanding that financial models are only projections. A number of internal and external factors can have an effect on the overall financial performance of a development and the investor’s ROI. Self-storage has been in the past and will certainly continue in the future to be one of the best investment vehicles available in not only this country, but many others out there also.
5 -In Comparison to Other Real-Estate Investments
One of the best ways to compare real-estate investments is to do the research and take a good look at the performance of self-storage and other real-estate investments over a period of the past decade.
6 – The End User
In the middle of times when a market is experiencing an economic recovery, business will begin to thrive, employment opportunities start to increase and the sales of new and existing single-family homes start to ascend. You would expect self-storage properties to do well, and they most certainly do. An evaluation of conventional self-storage property rent rolls over this time period would usually display a high percentage of mobile customers–people moving into the market for the very first time or customers buying up from starter homes. On the commercial side of things, increased business activity will mean an increased volume of self-storage commercial tenants. Contrarily, when the economy starts to falter, the same happens to business, employment and real estate in general. But, the reverse effect still causes the same mobility that most often benefits self-storage. People start to move out of the market or sell their homes and move into smaller homes or apartments.
Rents are of course another key to the success of any self-storage properties. The average annual rent ranges for the real-estate will all have to be worked out well in advance for the shape of the market. These have to be not only attractive to the customers, but also compete with any other self-storage companies in the same area.
Now you have the keys to the self-storage business, it’s up to you to open the doors! May fortune come your way!