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Increasing Self-Storage Efficiency and Profit Through Third-Party Services

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John O'Donnell, co-owner of six self-storage facilities with wife Jeaneen O'Donnell, uses third-party management to keep his portfolio running smoothly. "They take care of all the most difficult and important tasks, like marketing, to keep the place full; employment and training of staff; compliance and keeping the property up," he says. "I believe a complete third-party management company can do that better than I can."

Many management companies take over all facility functions, so the owner no longer has a concrete connection to the operation of the facility. "For the hands-on owner, it can be both difficult and emotional to step away from daily operations," says Dale Payne, a sales/client relations manager for Uncle Bob's Management LLC, a provider of self-storage management services. "This is one reason it is so important for an owner to have a strong level of trust in the management company's ability."

While turning a business over to a third-party management company may mean the owner has less control, it doesn’t mean he has no control at all. "I think it's important to remember the old saying—you can only expect what you inspect," O'Donnell says. "It's up to the owner to review the reports regularly, make sure the trends are in the right direction, communicate with the regional or district manager, and visit the property periodically to make sure it's being maintained the way you want it."

One of the primary reasons owners turn properties over to a third-party management firm is lack of resources for necessary components such as marketing and maintenance. "Owners should consider partnering with a management company when they are struggling to compete with Internet marketing and offering online options for customers, when day-to-day operations and  maintenance become a burden or, overall, when a property is not operating at its potential due to lack of resources," says Carol Shipley, vice president of third-party management for CubeSmart, an owner/operator, third-party manager and acquirer of self-storage facilities.

It's also up to the owner to do a lot of research before choosing a company to oversee his business. "Hiring a company to run a property is a big step," says Maurice Pogoda, president of Pogoda Cos., which offers self-storage management, brokerage and consulting services in Illinois, Indiana, Michigan and Ohio. "There are some specific questions that should be asked before someone trusts his valued asset to a third-party management company." He advises owners ask about the number of years the company has been in the industry, proof of the company's ability to meet goals, references provided by the company, and other telling information.

When it comes down to choosing a third-party management company, there are many factors to consider, but revenue is ultimately the goal. "While there are many qualitative factors that make a third-party management company attractive, owners need to make their decision on quantitative results and who has the ability to manage their site best," says Clint Halverson, vice president for Extra Space Storage Inc., self-storage owner and operator that also offers third-party management services. "As a whole, year over year, managed properties have experienced both double-digit revenue growth, increased net operating income, occupancy and rate per square foot.”

At the end of the day, outsourcing any aspect of your business to a third-party company isn't about whether you and your management team are capable of handling these business components in house. The deciding factor lies in whether allowing experts who have more resources and possibly as much experience in the self-storage industry to handle marketing, maintenance, payments or operation will be more beneficial and generate more revenue for a your facility.

"When you look at the scope [of work] and how much time it would take our team, it doesn't make sense to do it all ourselves," says Anne Ballard, president of marketing, training and developmental services for Universal Storage Group. "These third-party companies are specialists at what they do—software, call centers, Web development, retail items, etc. Why would we try to recreate the wheel?"

Rachel Adams graduated from the Walter Cronkite School of Journalism and Mass Communication at Arizona State University with a bachelor's degree in journalism and a minor in Spanish. Her passion for writing and culture propelled her journey through college and has continued to inspire her endeavors with VIRGO Publishing, where she contributes to "Inside Self-Storage" and "Professional Door Dealer." Contact her with questions, comments or ideas at

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