The storage unit sector is performing well, and many investors want a piece of the action. Storage unit development is a profitable investment that demands careful budgeting and decision-making.
If you are considering investing in storage units, it is important to understand the costs involved in building many of them. You have two main choices regarding this aspect: you can either buy existing storage units or build a new one from scratch.
Building a new one can be tricky, but it has its perks. So let’s discuss, How much does it cost to build 100 storage units?
For more information, you can also check our storage guides.
Types of Storage Facilities
Before looking into the cost of building 100 storage units, it is important to understand the different types of storage facilities so that you can have an idea of what you are getting yourself into.
| Storage Facility Type | Description |
|---|---|
| Warehouse Storage | It offers spacious and modern units with climate control features, making them ideal for businesses storing inventory. You can easily accommodate bulky items in these units. |
| Self-Storage Units | It is a common type of storage unit, typically used for personal items, household goods, and small business inventory. These units come in various sizes and often have drive-up access. |
| Container Storage | It utilizes empty shipping containers arranged securely, providing smaller rental spaces suitable for short—or long-term storage needs. |
| Climate-controlled units | Climate-controlled units are intended to safeguard sensitive things from severe temperatures and humidity. They are great for keeping artwork, musical instruments, electronics, and essential documents. |
| Indoor Storage Units | Indoor Storage Units are inside a building, offering added security and protection from the elements. They are often climate-controlled and can vary in size. |
How Much Does It Cost to Build 100 Storage Units?
The burning question on everyone’s mind is how much it costs to build 100 Storage Units.
Acquiring the land is the first step, but that is just the tip of the iceberg. Before the first brick is laid, there is some groundwork every investor must consider.
Here is a rough breakdown of the prices for 100 storage units according to their sizes and space.
| Numbers of Storage Units | Unit Size | Total Space | Average cost |
|---|---|---|---|
| 100 | 10’x20’ | 20,000 square feet | $170,000 and $280,000 |
| 100 | 10’x10’ | 10,000 square feet | $85,000 and $140,000 |
| 100 | 5’x10’ | 5,000 square feet | $42,500 and $70,000 |
However, to fully understand the cost of building a 100-storage unit facility, we must examine the factors affecting the total cost.
Factors Affecting Total Expenses of Building 100 Storage Units
Here are some of the factors that can greatly influence the cost of building 100 storage units:
Geographic Location Cost:
The geographic location of the storage unit facility plays a critical role in construction costs.
Land Costs: When considering land for your storage facility, remember that prices can vary depending on where you are looking and what features you need. You will need land that will give you a good return on investment (ROI), ideally around 25% to 30%.
Location: Land prices can change depending on whether you are in an urban or rural area. Urban areas often incur higher construction expenses than rural locations.
Size Considerations: The size of the storage units you plan to build will also affect costs. Bigger units usually come with a higher price tag. For example:
A 5×5 unit might cost around $45.18 per square foot.
While a larger 10×20 unit could be around $122.83 per square foot.
Construction Cost:
Whether opting for a single-story structure or aiming high with a multi-story building, construction costs increase quickly.
Below is a summary of the factors that affect the construction cost of building a storage unit:
| Aspect | Cost Range |
|---|---|
| Land Acquisition | $6.82 per sq ft |
| Groundwork (Clearing, Drainage, Excavation) | $4.25 - $8 per sq ft |
| Construction (Single-story) | $50 - $70 per sq ft |
| Construction (multi-story) | $85 - $110 per sq ft |
| Deluxe Facilities (60,000 - 80,000 sq ft) | $5 million - $15+ million |
Infrastructure Development Expenses:
Many people tend to overlook the hidden costs of maintaining and developing a storage facility. On average, these expenses hover between $2.75 and $3.25 per square foot, but the catch is that they are anything but static.
To give you a rough estimate, below is a breakdown of development expenses.
| Expense | Type | Cost Range |
|---|---|---|
| Electricity | Utilities | $200 - $500 per month |
| Maintenance | Maintenance | $1000 - $3000 annually |
| Security | Security Systems | $100 - $300 per month |
| Insurance | Insurance Premiums | $1500 - $4000 annually |
| Property Taxes | Taxes | $2000 - $6000 annually |
Layout Expenses:
Designing and laying out storage units significantly impacts the overall construction costs of building 100 storage units.
Here is the average cost of designing and laying out 100 storage units:
| Expenditure Division | Average Cost for 100 Storage Units |
|---|---|
| Security Systems & Lighting | $20,000 |
| Site Preparation & Grading | $30,000 |
| Construction Materials | $150,000 |
| Architectural Drawings & Engineering Fees | $25,000 |
| Total | $225,000 |
Material and Labor Costs:
Labor costs can account for a major portion of the total budget when building 100 storage units.
Several factors influence material and construction costs, including material type, design complexity, and unit size. The typical cost of creating 100 storage units ranges between $500,000 and $1 million.
It is essential to account for labor expenditures, including the costs of skilled workers and contractors participating in the construction process. Labor costs might range from $50 to $150 per hour.
Cost Breakdown for Building 100 Storage Units
By now, you must have realized that many factors influence the total expenses of building 100 storage than just land and construction costs.
To calculate the cost of building 100 storage units, we have given you a rough estimate of all the factors you need to consider.
| Cost Component | Cost per Square Foot | Total Cost for 100 Units |
|---|---|---|
| Land | $6.82 | $682 |
| Construction | $26 | $2,600 |
| Architecture | $0.72 | $72 |
| Permits | $0.29 | $29 |
| Testing | $0.24 | $24 |
| Builder’s Risk Insurance | $0.04 | $4 |
| Marketing | $0.67 | $67 |
| Office Equipment | $0.19 | $19 |
| Legal Expenses | $0.19 | $19 |
| Closing Costs | $0.72 | $72 |
| Interests | $2.50 | $250 |
| Total | $38.31 | $3,818 |
(Note: These values are just an approximation to give you an idea about the cost of building 100 storage units and are subject to change according to your unique circumstances.)
Pros and Cons of Building 100 Storage Units
| Pros | Cons |
|---|---|
| High Demand for Storage Units | Market Research Required |
| Excellent Source of Passive Income | Risk of Overbuilding |
| Low Maintenance and Operational Costs | Management Challenges |
| Flexible Investment | High Competition |
| Easy to Scale the Business |
Financing Options and Loan Considerations
When considering funding the construction of 100 storage units, you have several financing options to explore.
Self-Financing
If you have enough funds, self-financing your storage unit project is an option. This avoids loans and debt, giving you full control over the project. However, it may not be feasible for everyone due to financial constraints.
Traditional Loans
Traditional loans from banks or credit unions are common for construction projects. They offer fixed or variable interest rates ranging from 5 to 25 years. Requirements typically include a down payment and collateral.
| Loan Type | Interest Rate | Terms |
|---|---|---|
| Small Business Administration (SBA) Loans | 6-8% | Up to 25 years |
| Commercial Bank Loans | 5-10% | Up to 25 years |
| Personal Loans | 10-30% | Up to 5 years |
Construction Loans
Consider construction loans to finance the construction phase. These short-term loans with higher interest rates cover construction costs. After completion, refinancing with another lender can secure lower rates.
Legal Considerations Before Building 100 Storage Units
Before you build 100 storage units, you must also consider all the legal aspects and considerations.
- Business Structure
| Business Structure | Details |
|---|---|
| Consideration | To avoid personal liability for business debts, consider setting up a company. |
| Advice | You should seek legal and financial advice to choose the right business structure. |
- Premises
| Premises | Details |
|---|---|
| Choice | While choosing premises, look for storage units with ample space and easy accessibility. |
| Options | Decide between converted warehouses or purpose-built facilities based on your budget and preferences. |
| Location | Locations play a significant role, so consider locating near densely populated areas to attract more customers. |
- Licenses and Permissions
| Licenses and Permissions | Details |
|---|---|
| Obtainment | Before building 100 storage units, you need to obtain the necessary council permissions and building permits. |
| Assistance | Conduct thorough research and seek legal assistance to streamline the application process. |
- Contracts
| Contracts | Details |
|---|---|
| Agreement | Contracts are paramount; therefore, a comprehensive services agreement detailing rental terms and conditions must be drafted. |
| Checks | You also need to conduct background checks on customers. |
| Legal Advice | You need legal advice to tailor contracts to your business advantage and limit liability. |
- Security
| Security | Details |
|---|---|
| Measures | You must decide on security measures such as traditional or digital keys, CCTV surveillance, and PIN-controlled access. |
| Investment | Evaluate the investment needed and weigh it against its appeal to potential customers. |
Key Takeaways
- You need to plan carefully when opening a self-storage company.
Consult with the best self-storage unit companies in USA for better understanding.
- You need legal and financial advice for your storage unit's business structure and contract setup.
- Work within your budget while establishing storage units and security measures.
