The debate over professional management companies vs. owner-managed properties has been ongoing for many years, with no end in sight. Each has its merits and downfalls, and it’s up to property owners to evaluate their situations candidly and determine what is right for them.
On Your Own
A third-party management company is 100 percent focused on the daily operations of the facilities under its supervision. This allows dedicated property owners to devote time and energy to their other careers or investments. A good management company will provide quality service, attention to detail, be easily accessible and give you the peace of mind to know everything is under control.
Is outside management for you? There are several key items to look at in making the decision. Be completely frank when looking at these areas of your business—your personal feelings mustn’t divert you from facing real problems or giving credit where it’s due.
Site managers are extremely important to a successful business. You’re entrusting them to manage multimillion-dollar investments with minimal supervision, so you understandably want to ensure they’ll be professionally trained, supervised and their performance is continually evaluated. While you’re in the office, you know how your mangers are taking care of your customers, but what happens in your absence?
Utilizing a “mystery shopping” service is one of the most effective ways to learn how your manager handles the first contact with potential customers. Mystery shoppers will call the facility during each month posing as a client in need of storage; the call will be recorded, scored and delivered to you. Information can then be shared with your manager and together you can agree on the positive aspects of the call and what improvements are needed.
If you suspect a bigger problem, you may want to send in a “mystery renter.” This person will visit the store, view a unit, even follow through with a rental. You can learn how the manager is selling your facility, and whether he’s closing the sale at the unit or waiting until he returns to the office with the customer; you don’t want to give prospects the chance to leave and check with your competitor before making a decision.
On Your Own
If you’re managing your facility on your own, devote time to reviewing reports every week, making regular phone calls and visiting your facility on a regular basis. If you haven’t been able to find opportunities to visit your site in a while, you might want to consider the services of a third-party management company.
With the proper software and excellent knowledge of the reports available to you, problems can be detected while they’re still small, avoiding costly trouble. A monthly site visit should include a cursory audit, phone-skills evaluation and a physical inventory of rental units.
Is your facility operating at its optimum occupancy and yielding the best return on your money? Reaching 100 percent occupancy is not the goal. To create the best income at your facility, you want to utilize customer service, marketing and rent increases to maintain your occupancy in the mid-90 percent range. The point is to collect the most rent possible for each unit while still having space available when new customers call.
Turning away business or placing would-be tenants on a waiting list does you no good; storage is need based, and if you can’t offer storage on-demand, customers will go to your competition.
Check the pricing in your area monthly to determine pricing adjustments you want to make. Such research also lets you know if a competitor in your area has begun a move-in special, and you can act on the information before you lose rentals because of the special.
Marketing your site can be complicated and should be tailored to each location. What works in California may not work as well in North Dakota. Learn the neighborhood around you and select programs to enhance the rental rates at your facility. It takes time and effort each month, but you’ll see results within a few weeks. Don’t expect a big increase in your rentals with marketing programs. Only so many potential customers need storage in your area each month, so you need to focus on getting a majority of them to visit you.
A good management company will have many marketing ideas and a strong knowledge of what works in various locations. This can keep you from wasting time and money trying to figure out where to focus your marketing thrust.
Also expect assistance in evaluating your Yellow Pages presence, an area where facilities tend to spend more than necessary. Your market radius is approximately 3 miles; therefore, the advertising focus should be within that area. With Yellow Pages books reaching millions of people, your ad should be designed to capture the attention of the people in your market—you don’t necessarily need to be the first full-page ad in the book to get the customer to call.
Dollars saved on Yellow Pages ads can be redistributed into marketing programs that will capture the attention of renters in your neighborhood.
A third-party management company, regardless of national location, should visit each property monthly. Representatives need to view the site operations and provide additional training as needed. Don’t let the location of the company’s corporate office scare you away from hiring the firm you want; most can handle managing properties in all regions of the country.
Many site owners in this industry have mastered the art of balancing facility management, careers and family time. However, if you’re feeling overwhelmed or want to take on another project (or a vacation), begin interviewing management companies to find the one that best suits your needs.
When you consider hiring someone to manage your facility, you must be able to trust them and allow total control over the daily operations at your facility. You’ll need to talk with the company, and allow their people to communicate with your site managers.
This can be a difficult transition in the beginning but a good management company will be able to ease your concerns and quickly improve facility. The increase in your bottom line should be more than enough to offset the cost of the management fee.
Tammy Ross is president of Cutting Edge Self Storage Management & Consulting in Salt Lake City. For more information, e-mail firstname.lastname@example.org; or call 801.273.1267.