Evaluating the Intangibles
Evaluating your management company through performance metrics is straightforward. Assessing intangibles is not. Consider the following:
Compatibility. Do you like working with your management company? Regardless of performance, if you can’t stand the people you work with, the relationship will deteriorate quickly.
Communication. Does your management company return your calls and e-mails in a timely manner, if at all? Does it meet your technical needs? Would you like items e-mailed to you instead of faxed or mailed? Do you have access to online reporting?
Reporting. Does your management company provide you with the necessary reporting on a daily, weekly or monthly basis?
Investments and exit strategies. Can your management company help you with additional investments or an exit strategy from your current facility? As you become a seasoned self-storage investor, you may want to discuss buying an additional facility, selling your existing facility, or developing a new one. Can your management company help you with that process?
Open Lines of Communication
As an owner or investor, if you need something or feel something is missing in regard to the management of your facility, just ask. All management companies look forward to speaking with their customers, and most wish to do so more often. A management company’s job is to serve the operational needs of the facility. As with any partnership, you must have clear expectations. Are yours in line with your market?
Hiring a third-party management company will not change certain things about your area. A management company cannot change the fact that your local municipality approved eight new self-storage facilities within a 3-mile radius of your site. It cannot change that a developer paid Manhattan, N.Y., real estate prices when developing a facility in Manhattan, Kan. And it cannot change the fact that an owner or investor overpaid for a facility.
With that said, a management company can help you with any of these situations by increasing NOI to a level that most individual investors couldn’t accomplish on their own. Management companies are experts in streamlining operations, opening new revenue streams, and decreasing expenses. Within the first month of the partnership, most management companies can identify ways to increase revenue and decrease costs at any facility.
If you’re looking for a management company, take the time to do your homework and interview a number of companies. This could lead you to the investment partnership of a lifetime.
Matthew Van Horn is vice president of Cutting Edge Self-Storage Management, a full-service management company specializing in management, feasibility studies, consulting and joint ventures within the self-storage industry. He is well-known for finding hidden profit centers in self-storage operations. For a complimentary copy of “Hidden Profit Discovery Session,” send an e-mail to firstname.lastname@example.org. For more information, call 866.970.EDGE or visit www.cuttingedgeselfstorage.com. Follow the company on Twitter at Cuttingedgemgt, and on Facebook at Cutting Edge Self-Storage Management.