Third-party management companies provide self-storage owners with a tremendous resource. Not only do they have the expertise and experience necessary to be competitive with the large, well-financed regional and national companies, they can provide certain economies of scale that might not be possible otherwise.
By hiring a professional management company, an owner gets the best of all worlds. He still owns the property—and gets a monthly check—without having to handle day-to-day operation. He has an expert with the tools and experience to help increase occupancy, decrease operating expenses, and oversee capital improvements and repairs. This leaves the owner with time to pursue other interests while knowing his property is being well-managed.
The decision to use a third-party management company is a big one. Most companies will require complete control over every aspect of day-to-day operation. Their contracts generally provide significant latitude in running the business, including making financial, personnel and policy decisions.
The management company is hired for its experience and expertise. Day-to-day operational burdens are removed from the owner's plate, but so is day-to-day control. If letting someone else run your business makes you uncomfortable, a management company is probably not for you. However, if you're open to letting a professional help you achieve your property’s maximum success, consider using one.
Finding the Right Company
There are many third-party management companies in self-storage today. They run the gamut from great to awful. Doing your due diligence before signing up with a particular firm is important to your ongoing peace of mind. When evaluating potential companies, consider how they answer the following questions:
How long has the company been in business and what is its experience in operating self-storage ? What is its track record? Does it have the proven ability to meet your goals, whether to increase occupancy, decrease expenses, etc.?
Is the company licensed to perform property-management services in your state? All states require that property-management companies have some type of licensing, generally the same type and level as a real estate sales professional.
What fees will you be charged and how are they calculated? While most management companies charge 6 percent of a project’s gross revenue, many increase or decrease this percentage based on faciilty size. Are there any other fees such as setup or additional maintenance?
How does the company maintain control over each site? How often do its representatives visit each property? What are the company’s audit procedures? Does it have contingency plans in case of an emergency? Does it have relief managers who can substitute in case a manager quits or goes on vacation?