The fee for the full-service management company ranges between 4 percent and 6.5 percent of the monthly gross, perhaps slightly higher in the Eastern states. A minimum monthly fee, which is probably higher than the percentage of the gross, may be charged for a new facility startup or for turning around a distressed property. At some point the percentage fee will be higher than the minimum monthly fee.
Most companies will ask for at least a two-year management contract, which is a reasonable allotment of time to start up or turn around a property. As an owner, you should think of the management fee as an investment in your business, not as an unnecessary yet required cost by a lender.
Management companies can be very successful if self-storage owners step back and give them the authority to manage. One of the biggest problems is an owner’s unwillingness to let go and let someone else manage his facility.
If you’ve conceived and delivered a brand-new storage facility, you must let go and turn your “baby” over to the professional daycare provider to help this child grow into the profitable adult it can become. It is not always easy for a parent to let go, but to achieve the desired goal of profitability, you must let the professional management company take over.
Remember, before you decide to use the expertise of a management company, you must have a realistic idea of what your goals are for choosing a management company in the first place. Do your research into various management companies’ qualifications and the services they offer. Weigh the pros and cons of each, and then settle on the best fit for you. Only then can you sit back, relax, and let them do your work for you.
Pamela Alton is the owner of Mini-Management Services, which offers feasibility studies, facility management, consulting, training, seminars and management placement nationwide. She can be contacted at 858.926.9039.