Now that you have done all your preliminary research, it is time to order the Feasibility Study. This study is crucial to getting your loan approved. It is crucial to knowing whether you have really found a good deal or if you are just trying to make the numbers work. Finally, it is critical to getting your investors on board with your project.
A feasibility study is done by a third party to give you an outside perspective. They have no interest in the property and so they are going to give you an unemotional picture of whether this is a good investment or not.
The feasibility study checks everything. They will verify what the area’s rental rates are to let you know if your project’s rates are high or low. They will check the demographics of the area to make sure that you are in an area that uses Self-Storage Facilities. They will verify your location to make sure that you are in a place where your target audience will rent. They will make sure that you are not out located. Location is very important when you are in the Self-Storage industry. The study also looks at the traffic count, your signage, how strong the market is, and the supply index. Each of these things adds up to tell you whether you have found a diamond or just glass.
If your feasibility study comes back positive, then you know that you have a project that you want to move forward on. They will verify the research that you have already done, so now you can take this to your investors and your banker.
One of the reasons that a feasibility study is so critical is your financing. Your lender is going to require it to make sure that they are lending on a good project. You can call up your banker and tell them all about the great investment opportunity that you have, and you will have the study to back you up.
You also need the feasibility study when you are presenting your project to potential investors. You can show them that you have a great investment from a credible third party perspective. This will make them more likely to jump on board with your project.
The feasibility study is just one of the many tools that you need to verify that you have a good project. To find out what other tools you might need to verify that you have a great opportunity, check out our training options. Whether you are just getting started or have been investing for decades, we have classes that will take you to the next level.