I'm contemplating either buying or building a self storage facility. In looking into the idea, it looks like SBA backed 504 loans, potentially including a Green 504 loan offer a lot of advantages - up to a 25 year term, fairly low interest rates (about 5 to 5.25%). Its also my general understanding is that in many cases all of the construction interest plus a 10% contingency and the first 2 years of payments can be financed into the loan.Anyone care to offer commentary on SBA loans or self storage?*notesI'm contemplating a facility with a mix of climate controlled and non-climate controlled units. If financing was reasonable, I would look into adding a PV system to meet the energy demand on the self storage section. I don't have a location picked out or anything like that. Its just been something I'm mulling over, and I'm looking into the markets close to me.
I’ll comment on self storage since I’ve owned one for about 20 years. Like anything real estate, location, location, location. Mine happens to be on a busy highway, so get lots of independent contractors storing stuff there that they can’t keep at job sites. It also feeds off the trailer park next door. This is an older facility built back in the 70s so there have been maintenance issues over the years. Mostly roofing and security fences/cameras.If starting from scratch, I’d do gross majority climate control especially if you’re in a very humid environment. I currently have none and not too feasible to build at my site. Go for larger storage rooms, 10x10 as smallest. I currently go up to 10x30. First thing I did was convert 5x10s into bigger places. Have as much automation as possible: security gates, indoor access, collections/payments, etc. Biggest thing is location. If not easy to access not going to attract people. JLC
Looking at your profile, I'm probably between you and Dallas, so I would say its a humid climate. I think the city I am in is overbuilt on self storage, but one of the larger cities I work in seems like it may be undeserved (growing population, adding apartments). If you don't mind sharing a little more, roughly what is your percentage occupancy? I currently have some stuff at a SecureCare self storage facility, which really opened my eyes to the business model.
If you don't mind sharing a little more, roughly what is your percentage occupancy?I'm roughly 60% occupancy on average. There are seasonal variations. Used to be higher years ago. I think what hurt was a couple climate control places opened up closer into town. JLC
This is something that I am interested in as well. The land looks like is the easy part. Finding folks that build these storage facilities and understanding how much it would cost is another. If you have all this info it would be great if you could share. --Rob
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