31 Jul 2024
Essentially market research - is crucial for your success in self-storage industry investing. Here are some steps you can take to understand the marketplace and assess market potential:
Competitive Analysis: Identify existing and planned competitors in the area and plot them on a map. Visit these facilities in person to assess their strengths and weaknesses. Engage in conversations with facility managers to gain insights into the market, such as occupancy rates, management quality, security measures, and customer demand for specific storage features like boat and RV storage or climate control.
Census Data Analysis: Start by gathering information from census data about the surrounding area of the proposed facility site. This should include population demographics, growth trends, housing types (renter/owner, multi/single family), and average income levels. You can obtain much of this data from your local planning department.
Identify Market Gaps: Assess the strengths and weaknesses of your competitors to identify any gaps in the market. Determine if there are unmet customer needs or specific storage products or services that are in demand but not currently offered in the area. This could present opportunities for differentiation and competitive advantage for your facility.
Key Takeaways:
Use your market research findings to inform your business strategy and decision-making process. Look for key takeaways such as competitor occupancy rates, management quality, and customer preferences. Identify areas where you can capitalize on market opportunities and address potential weaknesses to enhance your facility's success.
Age of the population, mobility rate, employment status, and income - are also crucial for assessing the viability and potential success of a self-storage facility. Here's a breakdown of the key measures to include in a feasibility study:
Current Population: Understand the size and composition of the population in the surrounding area to gauge potential demand for self-storage services.
Expected Growth: Assess projected population growth trends to anticipate future demand for storage solutions.
Housing Mix: Determine the proportion of renters versus homeowners, as well as the mix of single-family homes versus multi-unit housing, as this can impact storage needs and preferences.
Median Household Income: Analyze the income levels of residents to gauge their ability and willingness to afford self-storage services.
Proximity to Institutions: Take into account the presence of local colleges, airports and hospitals as these can influence storage demand from students, travelers and employees.
Number of Competitors: Determine how many similar self-storage businesses are currently operating in the area to assess market saturation and competition intensity.
Total Square Footage of Storage: Evaluate the overall supply of storage space in the 3-10 mile radius to understand the market's capacity and potential for additional facilities.
Services Offered: Identify the range of services provided by competitors, such as climate control, security features, and specialty storage options in order to assess your direct competitors. Also, be aware of special promotions: “50% off first month, “1st month free” etc.
Unit Mix: Understand the variety of unit sizes and types offered by your competitors to determine if there are gaps in the market or opportunities for differentiation.
Occupancy Rates: Gather data on the occupancy rates of competitors to gauge market demand and performance.
By thoroughly researching the marketplace and understanding the competitive landscape, you can make informed decisions that will help position your self-storage facility for success and maximize its potential in the market.
