Quick, a show of hands: Who here owns a car? Good. Now, who owns a self-storage property? OK, good. Now, whose self-storage facility is worth more than their car? Everyone, just as I suspected.
Here's the conundrum: Most of you perform regular maintenance on your car, for example, getting a tune-up, changing the oil, rotating the tires. And yet many of you fail to see any value or importance in having your self-storage facility regularly checked via a thorough operational audit. Are you more interested in maintaining the value of your car than your self-storage property? That doesn’t make any sense.
If you own a self-storage facility, doesn’t it seem reasonable and responsible to ensure it's running as effectively and efficiently as possible? Don’t you believe it’s important to make sure that what is likely one of your most valuable assets is properly managed? Why are you so willing to take a chance with such a valuable venture?
Conducting a regular and thorough operational audit of assets is one of the most important responsibilities of a self-storage owner. To leave the operation of those facilities to chance and trust everything is OK without a regular review is a risky proposition. At the very least, it could lead to missed opportunities and lost asset value. At the very worst, it could lead to a complete disaster. So why do so many operators take that risk?
Lack of Concern and Knowledge
Simply put, some self-storage operators just don’t see the need for an audit or don’t care. Some really don’t want to know and are satisfied with the status quo. They accept there are likely some problematic issues or even some minor theft, but they don’t want to make any changes that could mean more work for themselves.
An audit might turn up a theft issue that could lead to manager turnover, and that prospect scares them. Or it could reveal operational deficiencies that are better left alone and not shared with the rest of the investors.
Some owners just don’t know how to conduct an operational audit and have decided not to take advantage of the plethora of training resources available in the industry. Resources range from books and DVDs to webinars and association workshops, yet many are either too lazy to take the time or too cheap to spend the money to learn.
For those of you who do see the need for conducting an operational audit and review of your self-storage facility, here are some basic guidelines:
- Audits should be conducted at least annually, but twice a year is ideal.
- Audits should be conducted whenever there’s manager turnover. This ensures the new manager doesn’t unfairly inherit operational or theft issues.
- Audits should be conducted at random and without any advance notice.
- Audits can be conducted internally by ownership or upper management or by outside vendors. Most sophisticated operators use both resources to ensure compliance and consistency.
If you employ a third-party management company, you can expect regular audits of your facility several times a year. At least one of these should be completed by an outside vendor. There’s nothing wrong with expecting or insisting your management company has someone audit its work from time to time. Ask your management company for copies of every audit, including the one that’s outsourced.