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Strategies to Improve and Preserve Self-Storage Facility Value

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By Kevin Bledsoe

Self-storage owners often wonder what they can do to improve and preserve the value of their facilities. Whether you’ve owned a property for 20 years or one day, there are countless ways to achieve this goal. Some strategies include streamlined operation, site maintenance and capital improvements, and value-add products. When discussing operation and how it plays into a facility’s value, it’s important to focus on site audits, rate management, vacant-unit pricing, collections, staff training and marketing.

Each of these is part of the heart and soul of a successful self-storage business. Once you implement best practices in each area, you’ll be able to maintain and even maximize the value of your assets.

Site Audits

How a site audit is conducted will largely depend on who handles a property’s day-to-day management. Owners who manage their own sites should consider hiring an industry consultant to audit the facility annually. Those who hire property managers should develop a site-audit program to verify the facility is being maintained at a high standard. Those using a third-party management company should ask to see quarterly audit results.

A comprehensive site audit should an inspection of:

  • Units rented
  • Facility-maintenance standards
  • Vacant units
  • Financial data
  • Facility cleanliness
  • Marketing messages
  • Curb appeal
  • Leases
  • Past-due accounts
  • Sales processes

More often than not, the audit process is skipped, which results in poor operational processes and lost facility value due to a lack of attention to detail. Don’t let this happen to your business. Make site auditing a priority.

Rate Management

The cost of doing business continues to rise each year, and if you aren’t increasing your rates, you’ll see lower profit year over year. Implement a program that increases each tenant’s rate within the first nine months of renting a unit and continues to increase the rate annually thereafter. The cost of doing business increases 3 percent each year, so shoot to increase rates for all tenants 5 percent to 8 percent annually.

Vacant-Unit Pricing

Every month, it’s important to analyze the occupancy level of each unit size, the rate being charged, and the pricing and specials offered by your competition. Property owners often set prices when they open and revisit this model once a year to make adjustments. In the meantime, the competition has increased prices five times, resulting in lost profit for your facility. The effect over time is a tremendous amount of lost value that’s difficult to recapture.

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