The value of professional advice during a self-storage real estate transaction can’t simply be measured by wins and losses. Often, the most valuable guidance doesn’t even lead to a sale or purchase.

As a professional self-storage broker, I’ve analyzed and written articles on just about every aspect of the business over the years. However, I’ve rarely explained what the duties of good broker are and why we get paid to help people buy and sell properties. The easy answer is our clients believe they get value from our services.

What most outsiders don’t see or understand is the support of an experienced broker doesn’t start with the property listing; it starts several years—sometimes decades—before an owner even considers selling. In a recent survey of long-time industry brokers, it was clear many had been assisting their clients for more than 10 years, helping them with everything from rental-rate increases and property insurance to family matters, sales comparisons, industry vendors and financing, just to name a few.

Over the last several years, on average, more than a billion dollars in self-storage assets have traded hands annually. The overwhelming majority of transactions (90 percent or more) were handled by real estate brokers. However, there seems to be a rising trend of owners who are willing to consider transacting their properties “off-market” without professional help.

Today the value of an experienced self-storage broker is greater than ever. We’re seeing several large, well-capitalized buyers in the market, and many have in-house brokers or acquisition teams to solicit off-market deals. They entice owners with such things as no commissions, top-of-the-market valuation and quick closings. However, it’s clear they only have the buyer’s best interest in mind.

Understand What You’re Buying or Selling

The reality is while the dirt and bricks will be transferred by the deed, it’s the income steam that creates value in self-storage properties. In all income-producing assets, the valuation process is focused around net operating income and the potential for future revenue.

With all the new development in the self-storage industry in recent years, the potential of future income seems to be discounted. It’s important to understand the listing process doesn’t create value. Rather, the value of the property is already there and set by market buyers. Brokers aren’t magic-workers. It’s important to be wary of someone who tells you he can get you a crazy-high price for your property or who’s working for the buyer. The investment market is strong today, but finding a greater fool who’ll pay an outsized price for your property is a fool’s game!

There are many subtleties you need to consider when buying or selling self-storage, for example:

An experienced broker will be able to look at the specific circumstances of your property and operation and adjust the valuation accordingly. Remember that value is determined by what a qualified buyer is willing to pay, and a property that’s priced appropriately for the market is far more likely to sell in a reasonable timeframe.

Exposure Sells and Experience Matters

In self-storage, like any other business, exposure sells! Without it, how would a prospective buyer ever know about a property for sale? The only way to guarantee you’re receiving the highest and best offer for your facility is to ensure the maximum number of qualified buyers are aware of the sale and have the proper information to evaluate the investment opportunity.

When discussing your listing with a qualified broker, ask about marketing channels. How will he give your property the best exposure to qualified buyers and provide real distribution? Simply putting the property online isn’t enough.

While buyers tend to be concentrated on lower prices and sellers prefer higher ones, the deal is completed at a point where both sides can agree. Using a broker in the process can make a big difference. Only an experienced professional has access to all the tools, industry knowledge and relationships that’ll ensure maximum value and the highest degree of success.

The bottom line is self-storage investing is very competitive today and experience matters. National industry appraisers have consistently found that broker-managed transactions sell for 5 percent to 20 percent more than those without, and in a shorter timeframe. An experienced broker can also recommend solutions to problems when they inevitably arise. His knowledge will lead to a smoother, more productive, more profitable outcome.

It’s important to understand the purpose of a broker and what he does to create value. A well-seasoned one will increase the professionalism and profitability of your transaction, whether you’re buying or selling. He’ll also ensure you have the best possible advice with the most comprehensive marketing program so you’re maximizing the value of your investment.

There’s the old saying that “The lawyer who represents himself has a fool for a client.” The same is even more true of the real estate investor who acts as his own broker.

Ben Vestal is president of the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Argus provides brokerage, consulting and marketing services to buyers and sellers via an extensive marketing platform for self-storage properties. Property listings and informational resources can be found at www.argus-selfstorage.com. For more information, call 800.55.STORE; e-mail [email protected].