Expanding Your Facility: When & How to Invest in Additional Units
As a self-storage facility owner, you may reach a point where demand outpaces available space. Expansion is an exciting opportunity, but timing and strategy are crucial to ensure profitability. Here’s a guide to help you determine when to invest and how to do it effectively.
Signs It’s Time to Expand
Expanding your facility isn’t just about having more space - it’s about making a strategic move that increases revenue while maintaining efficiency. Here are key indicators that now might be the right time:
1. Consistently High Occupancy Rates
If your facility maintains an occupancy rate above 85-90% over an extended period, demand is strong. You may be turning away potential renters, signaling that additional units could generate more income.
2. Increased Local Demand
Monitor local market trends and population growth. If more people are moving into the area or businesses are growing, demand for storage solutions may rise. Check competitors’ availability - if they’re at capacity too, expansion is likely a smart move.
3. Customers Are Asking for More Space
Are your renters frequently requesting larger units? Do seasonal fluctuations leave you without availability? Paying close attention to customer inquiries can indicate a need for expanded offerings.
4. Financial Stability & Growth Projections
Ensure your business has strong financials before expanding. If profits are stable and you have the capital or financing options available, investing in additional units might enhance long-term revenue.
How to Expand Efficiently
Expanding requires careful planning to avoid unnecessary costs or wasted space. Follow these steps to invest wisely.
1. Conduct a Feasibility Study
Before breaking ground on new units, assess your local market, competitors, and potential construction costs. A feasibility study ensures your expansion will be profitable rather than overextending resources.
2. Explore Financing Options
Expansion can be costly, but several financing solutions can ease the process:
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Business loans tailored for real estate growth
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SBA loans designed for self-storage businesses
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Partnering with investors or exploring alternative funding sources
3. Optimize Layout & Unit Sizes
When expanding, consider your target customers - do they need small, medium, or large units? Analyze past rental trends to allocate space effectively.
4. Incorporate Mobile-Friendly Software
As you scale up, operational efficiency is key. Using management software like Unit Trac that allows customers to rent, pay, and access units online improves convenience and reduces administrative workload.
5. Invest in Security & Accessibility
New units should be as secure and easy to access as your existing ones. Consider gated entry systems, well-lit areas and easy access to units to maintain trust and attract renters.
Final Thoughts
Expanding your self-storage facility can be a lucrative investment if done strategically. By analyzing demand, securing financing, optimizing unit layouts, and improving accessibility, you’ll create a stronger business model that serves customers efficiently.
Thinking about expanding your facility? Start by assessing occupancy trends and demand, then plan smart investments to maximize profitability!