When you are considering which property to purchase, ask yourself the following:
What are the competitors? This should include not only the national chains but the independent locations as well. How do they market customers? Do they have websites? If so, where do they rank in terms of their search engine results? Where does the property you want to purchase appear? Optimally, you want the property you are considering to rank high. If it doesn’t rank high, yet it is still profitable, that could be the result of high demand in the area. Understanding what draws customers to the location enables you to better understand the property you are considering.
What opportunities are there for new competitors to enter? Is there a lot of land available, or is the area matured? You should take this into account.
What is the demand at the facility you are considering to purchase? This ties into what was discussed above. Demand might be very high for a location. While this is great for a business, it can, and usually does, attract other competitors. The top self storage operators are skilled at finding markets with unmet demand. If there’s land available, be prepared for more competitors to move in.
Search your competitors’ websites and use Google to determine the existing competitors. You should also visit the area, know your market and visit your local municipality to find out whether there are plans for new development in the area. For a more detailed analysis, consider a feasibility study, or work with your lender to have them order a commercial real estate appraisal from a firm that specializes in self storage. This information will not only satisfy your lender’s needs, but will give a better picture of your property and your competitors.