If you’re considering starting a self-storage development or expanding your business portfolio, one of the most important questions you need to answer is whether the market you’re targeting is actually feasible.
Self storage development isn’t just about finding available land or converting an existing building. It’s about understanding whether the market conditions, competition, and projected demand support long-term profitability.
At BMSGRP, we specialize in helping clients evaluate self storage feasibility with clear data and strategic insights. Here’s what goes into determining whether a market is truly viable and worth your investment.
Why A Feasibility Study Matters
You can build the most advanced facility with top-tier amenities, but if the need isn’t there, your investment won’t perform. That’s why feasibility should be the first step in any self storage development project.
A strong feasibility study can help you:
- Avoid oversaturated areas
- Understand realistic rental rates
- Identify the right unit mix for your target demographics
- See if your project aligns with current and future needs
- Justify your development to lenders and investors
A thorough self-storage feasibility study should include a competitive analysis of existing facilities in the target area. Without this level of analysis, you’re relying on assumptions. And in today’s competitive landscape, that’s a risk you can’t afford.
A recommended component of a feasibility study is a SWOT analysis to evaluate strengths, weaknesses, opportunities, and threats, ensuring all aspects of the project are considered.
A feasibility study also helps answer key questions about market viability and potential challenges, including those posed by changing demographics and economic conditions.
Key Factors That Determine Self Storage Feasibility
1. Population Density and Growth
A growing population means growing storage needs. Look for areas with rising housing development, job growth, and population inflow. The ideal markets are those where residential and commercial expansion are already underway.
To succeed in self storage development in 2026, it’s essential to find markets with growing populations and high household density, using data-driven site selection to identify the best opportunities.
2. Competition and Saturation
How many square feet of storage already exist per capita in the area? Are there new facilities coming online soon? Markets with high saturation may not support new development unless your project offers something meaningfully better.
It’s important to note that just because there is a lot of self-storage space per person in a market, it doesn’t automatically mean there is high demand or strong profitability. BMSGRP’s feasibility reports include full competitive audits with pricing analysis and positioning recommendations.
3. Household and Income Demographics
Your unit mix should match the lifestyle of your local population. For example, areas with high apartment density or college students may require smaller units, while suburban families may prefer larger, drive-up units or climate controlled self storage. Millennials are among the largest user groups of self-storage facilities, so understanding the needs and preferences of these customers is essential for accurate demand forecasting and effective self storage development.
If you are considering climate-controlled units, note that demand for these units is increasing due to their appeal to high-income demographics and specific climates.
4. Accessibility and Visibility
Even in the right market, a poor site can drag down your facility’s performance. The best locations have:
- Easy access from main roads
- High visibility and signage opportunities
- Minimal zoning or permitting hurdles
- Proximity to residential neighborhoods or small businesses
BMSGRP works with clients to assess not just the market, but the viability of specific sites.
5. Construction and Costs
The cost to start a self-storage business varies based on several things, most notably land pricing and construction requirements. Land costs can differ widely depending on the area, zoning, and location of the site. Construction expenses are influenced by the type of facility being built, whether it is single story, multi story, or climate controlled, as well as local labor and material conditions. Additional site development costs also play a role, especially when building on undeveloped land.
Understanding the average cost to build a self storage facility is essential to evaluating ROI. In 2026, average costs can vary significantly based on:
- Land acquisition (buying land or an existing facility can impact whether you build a single-story or multi story facility)
- Construction type (single-story vs. multi-story; the decision may depend on land costs, location, and development expenses)
- Whether the facility is climate controlled
- Local labor and material prices (material costs for self storage units are a key factor in securing funding)
- Soft costs (permitting, design, feasibility, marketing)
- Aspects such as lighting, insulation, and climate control, which all contribute to the total cost
Security system costs will depend on the type of system selected, the size of the facility, and other associated factors. You may also need to spend on access control systems, such as keypad entry, intercoms, or smartphone access hardware. In some cases, renting land may be more cost effective than buying, especially for developers seeking lower initial expenses.
If the projected revenue in your market can’t support that level of investment, the project isn’t feasible.
6. Demand Forecasting and Absorption Rates
Feasibility isn’t just about today’s numbers. It’s about future performance. You need to know:
- How quickly new units can be absorbed into the market
A feasibility study can help determine whether a self-storage facility will generate enough revenue to cover operating expenses and debt. - Whether there’s long-term demand beyond the initial lease-up
Financial modeling should assess whether the facility will produce sufficient income and profit to ensure long-term viability, with a focus on projected net operating income as a key indicator of financial performance and valuation. - How your pricing will need to evolve over time
That’s why BMSGRP’s feasibility reports include detailed lease-up projections and financial modeling to show when your project should stabilize—and at what occupancy and rate.
Regulatory Compliance: Navigating Local Laws and Zoning
When it comes to picking the perfect spot for your self storage business, regulatory compliance isn’t just important—it’s everything. You’ve got to do the homework upfront to make sure your facility checks every box for local zoning laws, building codes, and environmental requirements. Skip this step? You’re looking at costly delays, surprise expenses, or worse, having to shut down operations entirely. That’s not the kind of risk any smart investor wants to take.
Invest the time and money upfront to get your project compliant from day one, and you’re not just protecting your investment, you’re setting your self storage business up to thrive for years to come. Regulatory due diligence isn’t just another task on your to-do list. It’s the foundation of a profitable, rock-solid storage operation that stands the test of time.
Risk Assessment and Management
Think your self storage project is bulletproof? Every storage venture comes with its own unique challenges, and the smartest operators know that staying ahead of risk isn’t just smart—it’s essential for long-term success. Before you dive in headfirst, you’ll want to identify the potential curveballs heading your way, from market swings and environmental surprises to liability concerns and day-to-day operational hurdles.
Effective risk management isn’t about playing defense all day long—it’s about creating a self storage business that’s built to last, one that can weather whatever the market throws your way and keep thriving. Make risk assessment your secret weapon in both development and operations, and watch your storage facility stay competitive and profitable for years to come.
Self Storage Industry Outlook
The self storage world keeps shifting, and honestly? Staying ahead isn’t just smart, it’s essential if you want to thrive. This coming year looks promising for storage demand, thanks to tight space availability and how people’s needs keep evolving. For you as a storage operator, that spells opportunity. Real, long-term profit potential.
But let’s be real about what’s coming your way. Construction costs aren’t getting cheaper, competition’s heating up, and your customers? They expect more than ever. These aren’t just bumps in the road—they’re things that can make or break your facility’s success. Here’s the thing: you need to stay curious, keep digging into market data, and be ready to pivot when the industry shifts beneath you.
Want to navigate all this like a pro? A self storage consultant can be your secret weapon, offering insights that help you nail your unit mix and position your facility for what’s next. Focus on smart development, streamline your operations, and let data drive your decisions. That’s how you keep growing your storage business and hit those long-term goals—no matter how much the landscape changes around you.
Final Takeaways for Your Self Storage Business
Not every area is a good fit for self storage development. The only way to know for sure is to dig into the data.
Approaching self storage development with the right mind and a sense of confidence is essential—these qualities drive better decision-making and set your development up for success. As a company with deep expertise in the industry, BMSGRP helps clients make confident decisions with detailed self storage feasibility studies that evaluate everything from construction cost to forecasting and competitive positioning.
Thinking about a development? Let’s start with the facts. Reach out today to request a feasibility report.
