Over the last decade, the self-storage industry has grown to new heights. Todays self-storage facilities are built better, featuring the newest technological advancements and catering to a customers every need. With reasonable interest rates and quality returns, the industry has become an intriguing real estate investment. The lure of these returns has spawned a new generation of self-storage owners. With the emergence of this remodeled industry, the question becomes, "What is the best way to manage this new asset?"
People frequently forget self-storage is a business unto itself. Success in other industry venturessuch as apartment complexes, restaurants or constructiondoes not guarantee similar returns in the self-storage industry. Allowing a facility to succeed in the current environment takes skilled and knowledgeable professionals.
When is the best time to bring in a management company to handle your asset and help the facility reach its true potential? Owners typically look to an established management company when they are in one of four phases in their self-storage careers. What stage are you in?
Are you new to the self-storage industry?
Would you like to take a break from managing your own property?
Is your storage facility outside other business interests?
Has your facilitys business environment changed in such a way that you might benefit from an outside perspective?
Given the uniqueness of this industry, seeking guidance from a professional consultant is, as in any business venture, helpful and often necessary when youre just starting out. The services provided by a management company can help a new owner review current operations including budgets, software, managers, marketing techniques, competition, unit mix and other areas vital to the success of a new or existing facility.
Management companies can also implement structured policies and procedures along with providing the necessary forms for the facilitys daily operations. In addition, and perhaps the pinnacle reason, is a management company can help a new self-storage owner keep a facility stable while maintaining high standards of customer service during acquisitions or grand openings.
Along with handling operations, a quality management company will give you peace of mind knowing your investment is being guided in the right direction by people who have years of experience in the self-storage industry.
Sometimes self-storage owners consider contracting with a management company if they would like to step away from the day-to-day operations. Some have other personal and business interests, and may not be in a position to extensively monitor their investments daily activities. Many owners live long distances away from their investments and, along with the travel time spent to visit their investment and the consistent monitoring of properties, too much time is taken away from other preferred activities.
A management company offers owners freedom to be as involved or uninvolved as they wish. A good management company will keep the owner informed of any major changes while keeping the nonessential items in check, allowing investors to pursue other endeavors.
By utilizing professional management services you can eliminate daily worries of facility operations, yet feel satisfied your property will continue reaching operational targets under the guidance of the management company.
Just a Piece of the Pie
Most entrepreneurs dont start in the storage industry. They come from many different walks of life: banking, real estate, construction, healthcare or a combination of many career pursuits. Typically, they are diversified in several industries other than self-storage. It could be a self-storage facility was acquired or built as an additional income resource, an addition to an investment portfolio, and perhaps is not an owners priority.
Self-storage differs from managing apartment complexes, warehouses or parking garages, etc., because it requires daily reviews of manager activity, knowledge of the market surrounding the property and the constant need to keep up on changing laws in a specific locale. The storage industry is regulated by the laws of the state where the facility is based. Along with keeping state laws straight, a facility owner must include budgetary items, marketing plans and industry jargon unfamiliar to other industries. In other words, its not as easy as it looks from the onset.
A management company can keep all self-storage activity from spinning out of control. Most people with business smarts would never allow a cashier at a local supermarket to perform surgery on them, or ask their CPA for a haircut, yet many owners and potential owners will attempt to run or purchase a self-storage facility without any professional advice. For the easily identified and not-so obvious reasons, this could be futile. But a management company can come to the rescue and help property owners develop facilities into the investment vehicles they desire.
A Tune Up
Over time, a facilitys management style sometimes becomes stale. Operational strategies that worked previously may not produce the returns the owner expects or needs to continue to operate the self-storage investment. Perhaps a different perspective on facility operations could have a positive effect on the propertys income and freshen up things.
Contacting a management company can have a profound impact on the competitiveness and overall success of any self-storage investment. Management companies typically stay well informed with the changes of this dynamic market, reading trade magazines, attending seminars, speaking with other industry professionals, and constantly checking and tracking which operational items are consistently providing rentals to the sites they are contracted to manage.
Superior management companies also continually re-evaluate marketing budgets and monitor strategies they have actively placed in the local market to avoid funding advertising-type campaigns that no longer positively impact the facilitys bottom line.
When the Time Comes
If a storage owner feels an operational change is in need, or hed like to be updated on the status of the current market, a management company could be the right move. The management company selected should be staffed with people who are willing and able to help a facility owner reach investment goals in the timeliest manner possible.
Overall, the decision and timing to utilize the services of any management company will be different for each self-storage owner. If you feel it may be time for you, shop for a company that fits your style of business. When you narrow the field, make sure your successful candidate can positively answer the following questions:
Is the management company experienced?
Does it have references from other self-storage owners or industry professionals?
Are questions and concerns handled in a timely manner?
Does the management company communicate well?
Do you feel comfortable with the staff that will be overseeing your location?
These answers will help you select a team of professionals that can help guide your self-storage investment. Whether you are new to the industry, experienced in the industry, need a break or just an operational tune-up, choosing the right management company can help you reach your facilitys true peak of success.
Tammy Ross is president of Cutting Edge Self Storage Management & Consulting in Salt Lake City. For more information, e-mail [email protected]; or call 801.273.1267.