Owning a storage facility can be a big undertaking. Many owners find it easier to hire a third-party professional to oversee their facility. The manager handles the day-to-day business, so the self-storage owner only needs to sit back and wait for the checks to come in every month.
The management company takes care of all the operations.
As Inside Self Storagesays, the company makes policy decisions. They also deal with the finances and personnel. This takes the burden of arranging all these matters off the owner’s shoulders.
Third party self-storage managers typically provide trained staff.
Companies who are licensed to manage these types of facilities have employees that are trained in how to serve the customers right, and to run the business efficiently. They are also skilled in getting the word out about your facility, whether digitally or locally.
Management companies have direct experience in running storage facilities efficiently.
This might be especially important for new owners. However, any owner might find this knowledge positive for the bottom line. Efficient operations minimize the chance of waste and overages, thus maximizing profits.
Most professional storage facility companies take their payment as a share of revenue.
They may adjust the percentage up or down, depending on the size of the facility and how much income it produces. The more money they make for you from their marketing and service efforts, the more they make. Your incentives are aligned. Make sure you vet your manager to make sure that they offer you value for the fees you’ll pay. If your unit is near total occupancy and you have a solid customer base, a third-party manager might not make sense for you.
The management company handles collections.
Many owners would prefer not to have to chase down delinquent renters. A professional manager can take care of this for you. Their collection policies are usually set in stone, so there’s nothing personal about the collection. Customers know what will happen if they don’t keep up with their payments.
Self-storage facilities require a lot of supervision, which the company will conduct.
In order to keep the operation running in an efficient and professional way, it needs to be supervised and audited regularly. As an owner, you may not have time to do this.
These facilities also need maintenance and repair from time to time.
The manager organizes the schedule and performs (or contracts out) the repairs. With their extensive experience in the field, they help you budget for needed capital improvements.
The management company provides a budget.
This will give you some expectations as to what your P&L (profit and loss) statement will look like at the end of the year. The budget provides a guideline of what spending should look like. If the bills are higher, you’ll ask the manager for an explanation.
Because third party managers are often pretty large, they can provide economies of scale that a single owner-operator can’t.
As Noah Springer of Extra Space Storage notes, large self-storage management companies have access to a lot of data. They can often forecast demand and market conditions with much more detail than any individual owner can.
Management companies know how to optimize your on-line presence.
There’s a lot of digital marketing in the self-storage space. If you are new to online platforms, it can take a while to get up to speed. You also might not be interested in it! The company takes care of that for you in their marketing efforts.
The managers take care of pricing, and most importantly, updating the pricing.
Rents should be raised periodically to match inflation. However, many owners leave rates unchanged once a tenant is onsite. Having a rate increase policy lets the customer know what to expect. A management company can forecast future demand and adjust the rates for that as well.
It’s hard for small owners to compete against the large ones.
Bill Alter, who specializes in self storage as a real estate broker, says,“Operators who run their own properties can’t possibly afford the advertising and promotion that is required to compete against the big guys.” It’s also hard to grow by promoting internally. At some point, maintaining your growth trajectory means you’ll need to hire a third party manager. If you’re an owner who doesn’t want to deal with the headaches that come with handling day-to-day self-storage facility business, a third-party professional manager is something to look into. You will give up control of the operations, but you’ll have experts handling your facility. You need to perform your due diligence on any manager you’re thinking of hiring. Most states license property management companies. Start with the state association to make sure your prospective manager has a clean record. And if so, you can move on to checking references. If you’re able to find a good professional management company for your facility, you’ll likely see a good return on investment (ROI).
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