Follow the trends. Sometimes looking at a chart really helps identify positive or negative trends. Implementing a change as soon as you see a trend start to turn the wrong way can save thousands in lost revenue. For example, you can see on the management summary report that occupancy at “Site 1” is currently 78 percent. You remember the facility was a little higher in the summer months but suspect it’s just normal season shifts that’s driven it down slightly.
If you look at the accompanying chart for the occupancy at that facility and compare it to the trend for other facilities in the same geographic region, you can quickly see that you have an issue beyond normal season fluxes at Site 1. Something happened in June to dramatically change the trend.
The next step of the investigation would be to look at the trends of move-ins and move-outs to determine what’s driving the drop in occupancy. Looking at trend charts could mean increased revenue.
Potential revenue reports. Sometimes this report is called a unit mix report or occupancy statistics report. Whatever the name may be, this is an important report that lists all existing unit types at a property, tells you how many of them you have, how many are rented and at what rate and the current street rate for that unit type. If your move-ins are slow, you may want to study this report along with the competitive rates to make sure you are priced correctly.
If your existing tenants are paying much more than your street rates, you may be able to increase the street rates marginally. If you have one or two unit types with many vacancies, you can use this report to determine if you should do a conversion, taking down some walls to create larger units. You need to have the right unit mix at the right price to maximize profits.
Demographics report. Most management software systems have a survey tool built into them. This allows you to ask new and potential tenants a few critical questions at move in such as:
- How did you hear about us?
- What is the most important factor to you when deciding where to store your belongings?
- Did you use a printed phone book to look up our telephone number?
- How far away do you live?
The answers to these questions will help you determine if your marketing efforts are working and, subsequently, where to spend your marketing dollars going forward to get the highest return on investment. Study who your customers really are so you aren’t marketing to those who aren’t.
Audits. Make sure your third-party management firm or someone working for you who isn’t at the property every day is auditing your facility at least quarterly. This will help protect you and your asset from any liability that could arise from wrongful sales, ignored maintenance issues, incomplete paperwork and items of that nature. Don’t be afraid to ask the management firm to see a copy of the latest audit completed at your property. Protect yourself and your company.
Keep an eye on everything and be ready to take action should the need arrive. Professional property management firms will study the reports, watch trends and react quickly and proactively for you. Creating an additional $1,000 in net operating income can create $12,000 in asset value for your property.
Knowledge is power and the key to the success of your self-storage facility. If you don’t have the time to look at all this information every month, invest in someone who does. Hiring a management company or a qualified manager will give you access to the data whenever you need it, help you rest easy knowing your asset is in good hands and drive up the value of your self-storage facility.
Alyssa Quill is vice president of Investment Real Estate Management in York, Pa. She has worked in the self-storage industry for eight years in finance and operations roles. Investment Real Estate LLC provides self-storage brokerage, construction and management services to owners and investors in the Mid-Atlantic and Northeastern United States. For more information, call 717.779.0804; visit www.irellc.com.