Ballard suggests owners meet with their management company at least monthly in the beginning. “After everyone is more comfortable with reporting formats and ways to access data and provide instructions, then perhaps switch to quarterly or, as we have some long-term customers, only annually.”
While a third-party management company can bring a lot to the table, operators still need to be realistic, Springer says. “No third-party provider can change your results overnight. However, if the increase in revenue is not making up for the added expense and the property is not headed in the right direction, then the owner is not getting the most out of their third-party manager.”
Owners should also be concerned if the management company is not delivering on its promises, whether it’s timely reports or completing a project on time and on budget. “It really boils down to a trusting relationship with open dialogue and actions that match with what was promised initially,” Rogers says. “Hold the management company accountable, but keep an open mind to the realities of what can happen with the ebbs and flows of the business.”
Linnea Appleby, owner of Lime Tree Management, a Florida-based self-storage management and consulting firm, suggests owners regularly review reports, and visit their own site and their competitors to make sure their rates and occupancy are in line with the market. “Your site should be equal to or better than the others,” she says. “If it’s not, you’re not getting the most out of your management company.”
Making a Change
So what happens when a self-storage owner finds his management company is not meeting his expectations? It may be time to make a switch. “The best way to make a transition to a new management company is to just move forward,” Van Horn says. “The new management company will most likely have a team of people to work with the former management company to attain all of the day-to-day information they’ll need to move forward with the property.”
Some management contracts may contain a termination clause. If so, owners will need to coordinate the transition with the new company to organize such items as payroll, accounting, management software and other essentials, Appleby suggests. “Allow enough time for a smooth transition so there is as little disruption to the site as possible.”
Before making a switch, however, Van Horn says owners should seriously consider why they want to make the change. “Changing management companies on a regular basis can be detrimental to a property. It’s very similar to a quarterback in the NFL having three or four different offensive coordinators in a four-year period. The quarterback never gets comfortable or seems stable and never seems to reach his full potential. You don’t want your self-storage investment to have that type of instability.”
Speak with your current management company first to address your concerns and see if changes can be made. For example, if reports are not timely or marketing is underwhelming, ask the company what they can do to turn things around. “Be very clear with your issues and goals, then see if they’re addressed,” Van Horn says.
While operators should expect great things from their third-party management company, they also need to be realistic about their goals and expectations, communicate them, and be patient while the management company puts them into practice.
“The management of your investment is one of the most important decisions you can make,” Van Horn says. “Don’t settle. Make sure you hire the management company that best fits your expectations.”