Market prices for self-storage properties may be at the top of the bell curve, leading many owners to think about selling. Is your facility ready to claim top dollar? Having a strong track record of controlling expenses and increasing occupancy and revenue will attract the most serious investors. Following is advice to help you increase value before going to market.
Are they in order? It’s critical to have good, clean records. Key performance indicators such as occupancy, actual occupied rent, potential rent and accounts receivables greater than 30 days must be closely watched. Consider the following to keep these areas in check:
- Host an auction every month to free up units for paying tenants. It’s also a great way to change the behaviors of late-paying tenants.
- Sell ancillary items including retail merchandise, truck rentals, and tenant insurance or protection. This increases revenue and, therefore, property value.
- Verify that you have industry-standard fees in place for lien sales, admin duties, late payers, etc.
- Offer discounts only when it makes sense based on market dynamics.
- Check competitor pricing weekly and adjust accordingly.
- Push rates as high as the market can handle.
- Don’t get too hung up on occupancy and instead focus on increasing revenue as much as possible. This will have a huge impact on your selling price.
Are you staying on top of it? High standards in this area will bring top dollar, so be proactive. For example, sealed and striped asphalt provides a clean image. Damaged metal panels on buildings or sagging gutters should be fixed. Bollard covers add a nice touch.
Also, be on the lookout for ways to reduce your expenses. If something needs to be repaired or replaced, get at least three bids to ensure you’re not overpaying. In addition, preventive agreements can extend the life of your equipment.
Do you have a plan? You should build a strong online presence combined with grassroots marketing efforts. Also, ensure you have a trained, aggressive manager. You might be shocked at how much revenue can be added by closing just three or four more leads each month.
Is it inviting? Green grass, shrubs and flowers create a fantastic first impression. Is your office clean, bright and welcoming? Tenants like a safe, secure property, so cameras, adequate lighting and electronic gates add value.
Many owners may feel overwhelmed with the commitment and responsibility of self-managing a site, which makes selling seem like a good option. However, make sure you don’t leave any money on the table. A reputable broker will work with you on strategies to get the most from your property. Don’t rush it. Take the time to get all the above-mentioned items in order before listing your business.
Dave Deems is a district manager for Storage Asset Management Inc., a property-management and consulting firm that oversees more than 120 sites along the East Coast. Based in Central Florida, he has expertise in site analysis, accounting, human resources, lien laws, retail sales, marketing, maintenance, financial reporting and budgeting. For more information, visit www.storageassetmanagement.com.