Hiring a Third-Party Management Company for Self-Storage

Maurice Pogoda and Tom Berlin Comments
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Employee/vendor selection. The hiring, firing and supervising of everyone from your managers to your maintenance personnel and outside contractors should be handled by your management company. Make sure you fully understand your financial and legal responsibilities for the actions of the company and its employees. Competitive bidding should always be used to keep expenses down.

Operating guidelines. The management company should provide a policies and procedures manual that details how your store should be run. It should standardize your operation so your store will run at peak efficiency.

Tough collections policies and procedures. Though you might consider collections policies and procedures to be a part of the operating guidelines, this is an area that should be addressed separately and in considerable detail. It's easy to have a store that has 90 percent physical occupancy but only 70 percent economic occupancy. The difference is often the quality of collections.

Specialized marketing programs. Each facility has unique attributes and a unique market. Marketing materials and programs must emphasize the features of a site in a way that effectively reaches the local demographic. Something that works on one side of town may not work on the other.

Constant supervision. Frequent facility visits and audits are a must to maintain a professional appearance as well as to ensure a smooth, honest operation.

Repair/remodeling recommendation and supervision. The management company should offer suggestions for capital improvements, along with ensuring that routine maintenance is done properly and in a timely manner.

Annual budget preparation. You should receive a reasonable budget you can use as a guideline for financial expectations and as a monthly check of operational efficiency.

Regular contacts with management company personnel. You should have regular contact with management-company personnel from to keep you apprised of what is happening, good and bad, at your facility. Keep in mind that you are the client and paying for services. If you have questions or are unhappy with anything, contact with the company so it can work with you to resolve issues.

No management company can be expected to totally compensate for a poorly designed facility in a poor location or a saturated market. It should, however, be expected to provide you with services that justify its fees. The company should do everything possible to run your store in a professional manner that will not only increase occupancy and decrease delinquencies but, most important, improve the site's profitability, resulting in a more valuable asset.

Maurice Pogoda is president and Tom Berlin is vice president of operations for Pogoda Management Co. in Farmington Hills, Mich. Pogoda has approximately 3 million square feet of self-storage space under management in 38 stores in Michigan and Ohio. For more information, call 800.326.3199; visit www.pogodaco.com.

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