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Hiring the Right Management Firm for You

Maurice Pogoda and Tom Berlin Comments
Continued from page 2

Helpful Hints

Hiring a company to run your property is a big step. Most management companies will require complete control over every aspect of daily operations. Below are some specific questions that should be asked before entrusting your valued asset to such a company:

  • How long has the company been in business and what is its experience in operating self-storage stores?

  • What is the company’s track record? Does it have the proven ability to meet your goals, whether they are to increase occupancy, decrease expenses, or whatever?

  • Will the company provide references?

  • Is the company licensed to perform property-management services in the state where your store is located? Virtually all states require that companies managing property for a fee must have licensing, generally the same type and level as a real estate sales professional.

  • If your ultimate goal is to sell the store, does the company have experience in self-storage sales or will you have to hire another company when the time comes?

  • Will the company provide you with a written proposal that details what changes will be made and how your property will be marketed?

  • Will the company prepare an annual marketing plan and budget?

  • What fee will you be charged and how is it calculated? While most management companies charge 6 percent of a project’s gross revenues, many increase or decrease this depending on the size of the store. Are there any other fees for setup or maintenance?

  • What is the company philosophy? Is it just a bookkeeping service that will maintain the status quo, or will it manage your investment with a goal of maximizing returns?

  • How does the company maintain control over each store? How often do representatives visit each property? What are audit procedures? How are cash inlays and outlays monitored? Does the company have contingency plans in case of an emergency? Does it have relief managers who can substitute in case a manger quits or goes on vacation?

  • If the company doesn’t plan to keep your current managers, how are applicants screened? What type and level of training is offered for new employees and what kind of continuing education is provided for seasoned staff? Are the managers employed by you or the management company? How are managers compensated? Who is responsible for benefits? What happens to the employee if the management contract is terminated?

  • Are the management company’s operations computerized? Does it require onsite computers as a condition of management? If your store is not computerized, will the company handle the computerization?

  • How does the company pursue delinquent tenants and what are its auction procedures?

  • When maintenance is required, who does it and who will authorize it?

  • Is the company affiliated with any national organization or state self-storage associations? Do its employees attend continuing-education seminars or conferences that allow them to meet other real estate professionals and exchange ideas?

  • What kind of reporting can you expect? What types of situations will involve you?

  • Finally, why should you hire this company instead of another management company?

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