Short answer: Mark focuses on three things: some population growth, median income somewhat above the surrounding market average, and supply that isn’t outrunning demand. An overbuilt trade area is the one problem he says he can’t fix, so he is always willing to walk away.
Mark’s three factors #
- Population growth. He doesn’t need a huge population; he has successful projects in areas with fewer than 50,000 people within 3 to 5 miles. He does want more people moving in than leaving. In his view, growth will eventually fix many other mistakes.
- Median income. What counts as good depends on the market. He now looks for median income roughly 10–15% above the surrounding market’s average. In lower-income trade areas he has seen shorter stays and higher marketing costs because the same units are re-rented more often.
- Supply and demand. If supply exceeds demand, the usual way to rent units is to cut prices, and larger competitors can outlast a smaller owner. Mark cautions against believing great marketing alone can beat an overbuilt market.
Signs of a healthy area #
Grocery-anchored shopping centers, national retailers and other signs of local economic health tell Mark an area can sustain storage through different market cycles.
Watch your own bias #
Mark admits he has grown attached to locations and lost objectivity. Arguments like “there’s a new subdivision going in” rarely change the math: a 100-home neighborhood might produce about ten customers.
Related answers #
- Is square foot per capita a reliable measure of self-storage demand?
- Do you need a feasibility report and competitor analysis before buying or building?
- Why does visibility matter so much for a self-storage facility?
Source: Mark’s posts Five Beginner Mistakes to Avoid When Buying a Self-Storage Facility and The Square Foot per Capita Myth
