Short answer: Yes. Mark uses subscription data services for a first look but never buys a facility, especially one involving new space, without a full, quality feasibility report from a firm his lender accepts. He also studies competitors’ live rates, discounts and marketing so his projections reflect what it will really take to compete.
Feasibility reports #
Mark doesn’t consider a desktop study a good feasibility report in most cases. A full report costs real money, but he sees it as small compared with the cost of building something that shouldn’t have been built or buying a facility that takes twice as long to turn around as expected. Make sure your lender will accept the firm you hire. His recommended providers are on the Resources page.
Competitor analysis #
Revenue management algorithms, dynamic pricing, value pricing and sophisticated online marketing are now common. Checking one or two competitor websites isn’t enough. Mark uses a subscription service that shows current offered rates, discounts and 12-month rate history across the trade area, and projects income based on that. If competitors offer low move-in rates, you will probably have to as well, or you could miss your income assumptions by a wide margin.
Renting a unit from competitors is another way to learn their service, rate increases and weaknesses.
Related answers #
- What makes a good self-storage trade area?
- Is square foot per capita a reliable measure of self-storage demand?
- What are the most common mistakes when buying a first self-storage facility?
Source: Mark’s post Five Beginner Mistakes to Avoid When Buying a Self-Storage Facility
