Services offered by management companies run the gamut within our niche industry. Some include "soup to nuts" and all courses in between, while others are very basic. What role do management companies play in the startup and ongoing success of your self-storage property? Is there a perfect management company just for you?
To answer these and a multitude of other questions, we contacted industry experts for their opinions and offerings. In addition to sending out questionnaires to several well-known companies, I spent time on the Web to see how companies stack up. Some have gone to great detail with their online offerings, while others simply state they offer property management. I must say, after looking at more than 50 websites of those known to be offering these services, it would be difficult at best to make a decision based on online information alone.
The following, summarized from the surveys and website reviews, is an overview of the services offered, what should be expected and fees. Just as we ask our managers to compare themselves to their competition, it was of great interest to compare my own operation to those of my peers.
This is just what is says: management, accounting and oversight services for an agreed-upon fee or minimum monthly amount, whichever is greater. Minimum fees range from $1,500 to $3,000 per month for stores in lease-up. Management fees will generally fall in the 6 percent to 7 percent range for a single-store location.
This fee is calculated on the adjusted gross income per month and is paid monthly, typically in arrears. This means that services rendered in January will appear on the January statements (delivered to clients in February), and be paid once the month ending has occurred and been reconciled, likely around the 10th of February in this example.
Multiple-store discounts are sometimes given to a single client and can be as low as 4 percent of gross income. Start-up fees for 30 percent of the companies in the survey were between $3,000 and $5,000, with another 30 percent being $7,500-plus to assimilate a new property and get things set up within the company’s guidelines, including the business setup for the operating system, and accounting setup for budgets and projections.