A third-party management company has experience in property management, including finding, hiring, training and placement of onsite management staff and accounting and maintenance services. It will set up and handle all day-to-day operations and interaction with onsite personnel, marketing programs, facility inspections and audits, deciphering of facility software reports and reporting to the owners on a weekly or monthly basis. Sound like the help you need?
For services provided by a management company, a self-storage owner will be charged a fee, which will vary depending upon the quantity of services needed. Some offer full-service management only; others provide management, customized training of owners and staff, and consulting. Let's dig a little deeper, weighing out all the findings to decide if a management company is right for your self-storage business.
First Time for Everyone
If this is your first facility, some lending institutions may require that you utilize a third-party management company because, while lending you millions of dollars, the lender wants to make sure the investment is secure. A third-party management company has the expertise and a support foundation to manage a new project and the lenders know this! It gives a lender peace of mind.
It may also give you an advantage when it comes to securing a loan if you already have a management company consulting with you during development. You might even get a lower interest rate if you’ve already lined up a third-party company for the first two years of operations.
You may say, “Well, I have opened and operated my own business before, how hard can a self-storage facility be?” To that, self-storage veterans would reply, “If it was only that simple!”
If you have a small operation, less than 200 units, you didn’t need to borrow a lot of money to build your facility, and you have a bookkeeper already doing your accounting and payroll, then perhaps you don’t need a third-party management company. You may elect to consult with one just to establish management systems, and to train you and your staff in operations, facility inspections and interpreting management software reports. Some companies offer short-term services such as this and this may be all that you need.