Not too long ago, self-storage was considered a recession-proof industry. When things were good, business was good; when things were bad, business was still good. At the top of the real estate bubble, new investors were pouring money into self-storage based on historic numbers and the expectation of similar results moving forward. It seemed self-storage was the investment of which everyone wanted a piece.
Then came 2008. The downtown in the economy has had such a pervasive effect on the American population that self-storage is seriously feeling the pinch. This, coupled with increased competition and rising expenses, has become the perfect storm keeping many storage owners from getting a good night’s sleep. Businesses that once were considered or expected to be cash cows are now finding the grazing pasture sparse.
A Second Opinion
In this economy, facility owners have to ask hard questions and make even harder decisions. It’s more critical than ever that these questions are answered with diligence and scrutiny, and decisions are followed by action and evaluation―not an easy task even in the best of times.
Now could be the time to consider partnering with a self-storage consultant or management company to guide you. Whatever your priorities are for your business operations, an outside assessment can provide objectivity and perspective. Here is a short yes/no assessment to help you identify potential problems:
Yes No My competitors are getting more business than I am.
Yes No I don’t audit. I trust my manager completely.
Yes No We have not increased rental rates in more than a year.
Yes No I think our delinquencies are higher than they should be.
Yes No We pay way too much for Yellow Pages advertising.
Yes No I'm not sure we are following the right auction procedures.
Yes No My rates are significantly lower than my competitors’ rates.
Yes No We generally let the manager decide what special to give.
Yes No We are not getting the results we need from our marketing or advertising.
Yes No We have not had our lease and letters reviewed in a long time.