Profitability Calculation Methodology
Understanding how we calculate investment potential for container-based self-storage facilities
Beta Version Disclaimer
This profitability calculator is currently in Beta and provided for informational purposes only. The calculations are based on industry benchmarks and market research but should not be considered financial advice.
You must conduct your own due diligence and consult with qualified financial advisors, accountants, and industry experts before making any investment decisions.
Important: For SALE listings, our calculations do not include financing costs such as mortgage interest, loan fees, or down payment requirements. All projections assume full cash purchase.
Overview
Our profitability model evaluates commercial properties for conversion into container-based self-storage facilities. The system generates 5-year financial projections based on site characteristics, local demographics, traffic patterns, and competitive landscape.
We analyze two types of listings differently: LEASE properties (where you rent the land) and SALE properties (where you purchase the land). Each has distinct investment structures and profitability considerations.
Revenue Model
Container-Based Pricing
Revenue is calculated based on 20-foot shipping containers (160 sq ft each) with weekly rental rates determined by market conditions:
Regional Pricing Adjustments
Base rates are multiplied by regional factors reflecting local market conditions:
Income-Based Pricing
Affluent areas support premium pricing while lower-income areas require competitive rates:
Insurance Surcharge: All rental rates include a 10% insurance surcharge, reflecting industry standard practice for customer storage insurance.
Cost Structure
One-Time Setup Costs
* Fencing and groundworks costs scale proportionally with site size
Monthly Operating Costs
* No staffing costs included - assumes automated facility with remote management
SALE Listings - Finance Costs Not Included: For properties purchased outright, our calculations assume full cash payment. Mortgage interest, loan origination fees, and other financing costs are not factored into the profitability projections.
Occupancy Ramp-Up Model
Occupancy increases gradually over time based on competitive landscape. Markets with fewer competitors achieve higher occupancy rates faster:
| Competition Level | Months to Max | Target Occupancy |
|---|---|---|
| Low Competition (Score 80-100) | 10 months | 85% |
| Medium Competition (Score 40-79) | 14 months | 80% |
| High Competition (Score 0-39) | 20 months | 75% |
Year 1: Ramping from 0% to partial occupancy (average 35-40%)
Year 2: Continuing ramp-up if needed
Year 3-5: Steady state at target occupancy with 3% annual price increases
Profitability Score (0-100)
Our profitability score combines three key financial metrics to provide an overall investment rating:
1. ROI Score (0-40 points)
Measures 5-year return on investment relative to total setup costs.
• 100% ROI = 20 points
• Formula: min(40, year5ROI ÷ 5)
2. Breakeven Score (0-30 points)
Rewards faster path to profitability. Shorter breakeven = higher score.
• 24 months = 12 points
• 36+ months = 0 points
• Formula: max(0, 30 - (months - 12) × 1.5)
3. Profit Margin Score (0-30 points)
Evaluates operational efficiency through Year 5 net profit margin.
• 30% margin = 15 points
• Formula: min(30, (netProfit ÷ revenue) × 50)
Rating Thresholds
LEASE vs SALE Listings
LEASE Listings
- ✓Lower upfront investment (setup costs only)
- ✓Annual rent included in monthly operating costs
- ✓Faster breakeven due to lower initial capital
- ✗No equity building or property appreciation
- ✗Ongoing rent expense reduces long-term profit
SALE Listings
- ✓Build equity and benefit from property appreciation
- ✓No ongoing rent expense (higher long-term profit)
- ✓Full control over property and exit strategy
- ✗Higher upfront investment (land + setup costs)
- ✗Financing costs NOT included in our calculations
Important Legal Disclaimer
The profitability calculations, scores, and projections provided by this platform are estimates based on industry benchmarks, market research, and mathematical models. They are intended for informational and educational purposes only and should not be construed as financial, investment, or legal advice.
Actual results may vary significantly due to factors including but not limited to: local market conditions, economic changes, regulatory requirements, planning permission outcomes, construction costs, operational efficiency, competition, marketing effectiveness, and unforeseen circumstances.
Before making any investment decision, you must:
- Conduct thorough due diligence on the specific property
- Consult with qualified financial advisors and accountants
- Obtain professional legal advice regarding contracts and regulations
- Verify all assumptions and calculations independently
- Consider financing costs if purchasing with borrowed capital
- Assess your personal financial situation and risk tolerance
We accept no liability for any financial losses or damages arising from the use of this calculator or reliance on its outputs. All investment decisions are made entirely at your own risk.