Promotions and IncentivesApril 28, 2020
Do Your Homework
Understanding the relationship between the key metrics when acquiring property for self storage is essential. This expertise enables any project to be appraised and modelled, considering key sensitivities not only from a property perspective, but also combined with the forecast performance of the operational business.
Whether the property is already owned, leased or is a possible acquisition, a full appraisal of the property and the Business Plan can be undertaken.
The property is one of the key elements of any self storage business, it’s location, size, accessibility, condition and many other factors will affect the business’s potential success. Comprehensively understanding this element of any self storage venture at the beginning will assist in optimising returns and reducing exposure.
If the property is leasehold, what is the optimum length of lease to sign? If you are looking to convert a property what are the pitfalls? Will the floors take the loads? Where should the reception be? What are the adjoining uses? Is there a planning issue?
There are numerous questions that will not only influence the operational performance of the business but also its capital value and saleability.
All these questions need an answer before committing to a project. Doing this comprehensive homework up front will help to avoid problems and exposure further down the road. Acquiring, developing and converting property for self storage will involve significant expenditure and therefore it is essential to carry out comprehensive due diligence and appraisal before getting to the point of no return.