If you are considering building a steel self-storage facility you may be wondering about the costs involved. Construction projects usually have a few more categories of expenses that people don’t think about but here are some of the factors that impact the cost of this type of project.
There will be variations across regions and depending on the overall economy as well as the fluctuations in the price of commodities but you can get a rough idea of how much you will need to invest to build a steel self-storage facility.
Land and labor
The price of land varies depending on its location, location, location. Also, the type of land can impact purchase price and the cost of preparation. Since you will probably want to build your steel self-storage facility near the people who will rent from you, the land you purchase will be close to or within a municipality. In other words, more expensive than land out in the country.
A common rule of thumb says that land should cost no more than 20% to 30% of your total development costs. You can also calculate your net cost per rentable foot of building space by dividing the amount per gross square footage by the percent coverage of the lot. You will have a ballpark of how much you can expect in rents after other expenses to help you recoup the land cost.
If you take out a business loan for the land and/or the project, remember to include your debt service load when calculating your monthly expenses and overall budget.
One of the advantages of a steel self-storage facility is that it can be built on oddly shaped property and property with sharp slopes which aren’t desirable for most other projects. You can usually get a price break on these lots. A soil test will tell you if the surrounding area can support your project; ideally the test would be performed before you purchase the site.
Before the building can be erected, you need to prepare the site. Site preparation includes clearing and grading with extra costs for removing trees and shrubs, including any special permits for doing so. If the terrain is rocky, you may require rock removal services. If you are building on a previously used site, you may need to remove old underground infrastructure and the remains of previous buildings.
The price of labor also varies according to location although you won’t need to provide transportation or boarding at a remote site. You will need to hire contractors and workers who are experienced with erecting a steel building. A prefabricated steel building kit can shorten the amount of time it takes to put the building up and lower your labor costs.
The price of steel and other commodities can fluctuate due to several factors out of your control. On the other hand, when you build with steel you are making a long-term investment in a highly durable facility that is low maintenance and resistant to fire, pests, and deterioration.
At its most basic, a steel self-storage building is a series of steel garages or sheds with one or more shared walls. Access to each unit can be a regular door or a roll-up garage type door. The roof is a continuous steel roof to cover each group of units. Nothing more fancy than wall and roof panels. Many facilities do not provide electricity for lights inside the units so there is no need for wiring.
Since length can be added to steel buildings without any extra bracing or other structural changes, you can build a long line of units for relatively little money.
Your costs will go higher if:
- You choose to build a multi-story facility
- You require special architectural detailing to match the surrounding area
- You offer climate-controlled units
Each of these adds to the materials required to complete the project. Climate controlled units require HVAC infrastructure and insulation, including the installation of electrical utilities. A multi-story facility needs elevators and a stronger foundation than a single story building. The architectural flourishes will require custom design and installation.
However, building a second story is an easy and inexpensive way to double your net leasable square footage, offsetting the extra costs of multiple floors and the need for elevator access. A repetitive design can also shorten erection time and may decrease the total material costs.
Site access and logistics
During the preparation and construction process, if you are within a certain range of other businesses or residences, you may be required to file a noise abatement plan and limit the hours of construction, which will lengthen the project timeline.
You will also be required to pay for permits from the municipality for various stages and parts of your project and admit inspectors. Permit requirements and costs can change, so keep in mind that if you will be delaying the start of your project, permits may go up in price or you may have a more lengthy set of requirements to meet than you do today.
If you will require a crane or other heavy equipment, you may be required to obtain a permit for those as well. You will need to determine how to get the equipment, labor, and materials onto the site without unduly disrupting the surrounding community.
The weather is famous for not cooperating with human plans. Weather delays should be expected, especially during certain times of the year and in certain climates. Spring tends to bring unsettled weather with hail, tornadoes, and rain, and damaging winds in some areas of the country. If your site is near a creek or river, you should check for the possibility of flooding.
As mentioned above, permitting changes can create additional costs, both in terms of the price of the permit but also in terms of the materials and building methods you are allowed to use. The prevailing economic conditions can also impact your costs. The economy affects labor availability, the cost of materials and land, and your future renters.
Planning your metal self-storage facility budget
Each construction project has its own list of factors impacting the building of a steel self-storage facility but this overview should get you started thinking about what your site and planned facility may cost and how to budget it.
Most of the impact to your cost will come from the price of the land but once you have improved it with utilities and structures, a steel self-storage facility will pay you back while you own it and when you sell.