A small facility will cost $18-25 per square foot. The building, erection, and foundation will cost $12-15 per square foot, but additional costs include excavation, grading, fencing, etc. A larger site with enhancements, such as paving or an office, will cost $25-32 per square foot. A state-of-the-art facility with an apartment, total security system (door alarms, cameras, etc.) would cost $30-$40 or more per square foot. All of these estimates exclude land costs.

For one-story buildings, anticipate 30-38% building coverage. This rule of thumb provides approximately 13,000 to 16,000 square feet of storage per acre. The ideal site would consist of narrow buildings with driveways so that all of the units face the outside with drive-up access. Customers love to be able to drive up to their own unit. The problem this creates is that it burns up a lot of land and you get only 30% coverage. Most people can't afford to build this way anymore. The trend today is to build wide buildings and eliminate driveways. Developers are constructing buildings anywhere from 60- to 200-foot wide. This method allows you to increase your coverage up to 45%. However, if you build wide buildings, it is necessary to climate control the hallways. This ensures the units are rentable and will also increase your net revenue since climate control demands a higher price.

If you land has more than a ten-foot elevation change in it, it might be wise to build a two-story into a hill design. This design is superior to conventional two-story buildings because there is no need for stairs or elevators. Consequently, to the customer it seems like a one-story building. Since you use two floors, you will lose around 20% of the building to hallways, but you should still end up with over 40% building coverage. The negative of this design is that your grading costs and foundation/retaining wall costs are expensive.

With land costs escalating, many developers are looking to build two-, three-, or four-story buildings. With each story you build, you gain a lot of square footage, but each floor carries a lot of additional costs. Customers are leery of having to walk upstairs with their goods. So it is recommended that all multi-story buildings have elevators. Two-story buildings are the most common design. They typically can be built without sprinkler systems, while three- or four-story buildings normally need to have sprinkler systems. Regardless, with any multi-story building, you will lose around 25% of building due to hallways, stairs, elevators, etc. The cost of multi-story buildings typically runs at least $10-12 per square foot per floor.

We recommend that you look at the competition near you and your land costs to determine what type of building design you should construct. Check out our investment calculator to determine the amount of net rentable square footage you will need to have a viable self-storage project.

Self storage is a retail business. A good retail location is essential to renting units. Visibility, ease of access, and how close you are to the population are also important. If the location is good, go to the city building department to determine if the property is properly zoned to build self storage. If so, get the proper permits and approvals needed to build (i.e. architectural review board, conservations board, department of transportation approval, etc.) For more information, see our find land section.

I recommend that you talk to the building departments for the cities you are interested in developing in to find out what zoning you need to develop self storage. All cities have developed a city/county map that shows the zoning of all the land in the community. The process is much easier if you only pursue properly zoned land. If you want a zone change, I recommend you hire an expert to have any chance for success.

While every self-storage owner dreams of building the perfect facility on the perfect site with perfect land conditions, in reality, this ideal site can be extremely hard to come by. In my opinion, if you can find a site that has the right price, location, and visibility, but is small, you can cut costs and make it work by being creative in the way you build or run it.

One way to increase net rentable square footage is to maximize the amount of units on the site by laying out wide one-story buildings with interior hallways, instead of narrow buildings with all exterior drive-up access. The buildings might be over 100 feet wide, which minimizes the need for driveways. If even more net rentable square footage is needed to make your project economically feasible, consider incorporating a multi-story building into your plan.

You must also take into account how you will manage the facility. In an ideal situation, you would have a manager on site everyday. If your site can only accommodate 200 units versus the 300-350 on a large site, you will need an alternative management approach in order to make your project economically feasible. One suggestion is to have the entire site run from a nearby business. Another idea is to build an office on your site, but lease it out to a business such as a carwash, tool rental, real estate office, etc. That business can then manage and rent your units out for you. The last option is to utilize an ATM-type machine to rent out your units, in combination with renting out units from your home.

This depends on how you're going to manage your facility. If you plan to run the facility yourself out of your home or through another business you already own, you can make a good return on your investment with as little as 2,000 square feet. If you employ a manager to run the self-storage site, you will have to build at least 25,000-30,000 square feet to offset this cost. If you build an apartment and have a live-in manager, you will need to build at least 45,000 square feet. These are rough estimates that will change depending on the rental rate structure of your community.