Top 5 Factors That Determine a Successful Self-Storage Location
Securing land for a self-storage development is a major milestone, but it’s just the beginning. Not every piece of land is destined to be a profitable self-storage facility—even if it seems like a prime location. Before moving forward with construction and development, the most important step is answering a crucial question: Does this site have the demand, accessibility, and competitive edge needed for a self-storage facility to succeed?
Even the most well-designed facility—equipped with state-of-the-art security, climate-controlled units, and modern amenities—cannot overcome poor site selection.
Wondering how to select a self storage location or what makes a good self storage location? A self-storage feasibility study provides the data-driven insights necessary to determine whether a location has strong market potential or hidden risks that could hinder profitability. By analyzing factors like demographics, market demand, competitive landscape, and financial projections, investors can make informed decisions that ensure long-term success.
1. Why a Self-Storage Site Must Be Evaluated Before Breaking Ground
While self-storage continues to be one of the most recession-resistant commercial real estate investments, not all locations are created equal. Site selection is an extensive, multi-step process that requires expertise, industry knowledge, and a thorough understanding of local market conditions.
Some investors make the mistake of assuming that because a site is available, near a growing population, or in a high-traffic area, it will automatically be a profitable investment. However, many variables must align for a self-storage facility to thrive. Factors like competitor saturation, local regulations, and absorption rates play a crucial role in determining the financial viability of a project.
A BMSGRP Self Storage Feasibility Study eliminates uncertainty by thoroughly evaluating whether a location has the potential to generate strong occupancy, long-term revenue, and sustainable growth.
2. Key Factors in Self-Storage Site Selection
A self-storage feasibility study examines multiple site-specific factors to determine whether a location is financially, operationally, and logistically viable.
Market Demand & Demographics
Understanding who will rent units is essential before investing in self-storage development. A market analysis assesses:
- Population Density – Higher population areas typically drive stronger demand for self-storage. A feasibility study evaluates current and projected population growth in the target area.
- Household Income & Homeownership Rates – Middle to upper-income areas tend to have higher demand for self-storage, especially for climate-controlled units. Renters, on the other hand, are twice as likely to use self-storage as homeowners.
- Residential Turnover – Areas with high relocation rates due to job markets, military bases, or universities often create steady demand for self-storage.
- Storage Demand Per Capita – The study evaluates whether the local market has unmet demand or if existing facilities already satisfy the needs of potential renters.
Competitive Landscape & Market Saturation
Many investors assume that a growing market means high demand, but oversaturation can quickly erode profitability. A feasibility study evaluates:
- Number of Existing Self-Storage Facilities – Too many facilities in one area can lead to price wars and lower-than-expected occupancy rates.
- Competitor Pricing & Occupancy Rates – A detailed rental rate summary ensures that the planned facility can compete while remaining profitable.
- Upcoming Developments – If new facilities are under construction, the market may soon become oversaturated. BMSGRP provides a five-year projection that factors in all proposed self-storage developments. According to industry reports, self-storage supply has been steadily increasing, making feasibility analysis even more critical.
Zoning & Permitting Regulations
Many municipalities have strict zoning laws regarding self-storage development. Some restrict self-storage facilities near residential areas or require conditional use permits (CUPs) to move forward. A feasibility study ensures the land is properly zoned before significant capital is invested.
The evaluation process includes:
- Zoning Compliance – Identifying whether the land is already approved for self-storage use.
- Setback & Building Requirements – Assessing local codes to ensure facility design meets all regulations.
- Permit Feasibility – Some locations require special approvals, environmental studies, or variances before construction can begin.
- Potential Future Zoning Changes – Understanding the local government’s stance on self-storage can help investors anticipate any future regulatory changes.
Ignoring zoning and permitting requirements can result in significant delays, redesign costs, or project termination.
3. Traffic & Accessibility
A self-storage facility needs to be easy to find and access—otherwise, potential customers may choose a competitor instead. A feasibility study evaluates:
- Traffic Counts & Visibility – Locations with high daily traffic volumes (10,000+ vehicles per day) generally attract more customers.
- Ingress & Egress – Sites with multiple entry points and easy drive-up access enhance customer convenience.
- Proximity to Residential & Commercial Areas – The closer a facility is to its target renters, the more likely it is to achieve high occupancy rates.
A self-storage market analysis determines whether a location has the accessibility and visibility necessary to attract long-term renters.
4. Financial Viability & Absorption Projections
Even if a location meets demographic, competitive, and accessibility criteria, it must also make financial sense. Investors need clear projections on occupancy rates, revenue potential, and operating costs before committing to development.
A BMSGRP Self Storage Feasibility Study includes:
- A 36-month, month-by-month fill-up projection – Predicting how quickly units will lease.
- A 7-year operational NOI (Net Operating Income) cash flow forecast – Estimating long-term revenue and profitability.
- A detailed proforma – Providing a full financial breakdown, including development costs, lease-up timelines, and expense summaries.
5. Expert Guidance in Evaluating Your Self-Storage Site
Determining whether a self-storage site is viable is not a decision that should be based on instinct or general market knowledge. The self-storage industry is highly data-driven, and an inaccurate assumption about demand, pricing, or competition could lead to low occupancy, financial loss, and an underperforming asset.
A BMSGRP Self Storage Feasibility Study ensures that your land is evaluated with the highest level of expertise, industry data, and financial modeling, giving investors the confidence to move forward—or pivot before making a costly mistake.
What Self Storage Feasibility Studies Include
A self-storage feasibility study is a comprehensive, research-driven process that provides:
- A detailed executive summary with clear recommendations on how to move forward.
- An in-depth competitor review, including on-site visits and pricing analysis.
- A comprehensive rate summary to determine optimal pricing strategies.
- A full financial proforma, ensuring the project’s long-term viability.
See What a Feasibility Study Looks Like
Before investing in a self-storage project, ensure the numbers work in your favor. View a sample feasibility report and learn how site selection, market analysis, and financial forecasting make the difference between success and failure.
Final Thoughts: Site Selection Determines Success
A profitable self-storage facility is not just about construction—it’s about location, demand, and financial strategy. The right site can mean high occupancy and strong returns, while the wrong site can lead to low demand and financial losses.
Self storage feasibility studies provide the critical data self storage investors need to make informed decisions. Before breaking ground, ensure your site is positioned for long-term profitability with a market-driven approach.
Learn more about BMSGRP’s Self Storage Feasibility Study and take the first step toward a successful development strategy.
