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ISS BLOG - It’s Time to Start Planning for the New Year! Here Are 5 Things You Need to Do for Your Self-Storage Business in 2025
The new year is just around the corner, and whether or not you’re ready, now is the time to start planning if you want to improve your self-storage business in 2025. A fellow owner, who’s also a developer and real estate expert, shares the five things you need to do to prepare your business for what’s ahead, so you can run a smoother operation and make more money.
4 Min Read
I can’t believe how quickly 2024 has flown by! As the year wraps up, it’s a perfect time to evaluate the past and prepare for the future. While I’m not a New Year’s resolution person—believing that the best time to act is always now—I do have five recommendations for self-storage owners who are looking to maximize profit in 2025.
1. Offer More Products and Services
As competition in the self-storage industry increases, it’s essential to diversify your offerings. Beyond traditional unit rentals, consider providing products and services such as packing supplies, moving trucks and incoming-shipment processing.
For instance, I’ve seen a self-storage facility that stood out in its market by accepting deliveries on behalf of customers and placing packages directly into their storage units. This unique service allowed the operator to charge a premium, thanks to a lack of competition in that area for this service.
At one of my own sites, we provide boat and RV detailing and wrapping services. All the customer has to do is drop off their vehicle and we take care of the rest.
2. Consistently Assess Local Demand
At each of my self-storage locations, we conduct a feasibility study of the local market twice a year to assess demand and set our strategy for the upcoming period. If we identify a need for expansion, we plan for efficient construction. Often, operators don’t realize they need to build until it’s too late, which leads to missed opportunities while customers go elsewhere.
In some cases, we may find that certain unit sizes are doing better than others, so we explore the possibility of changing our unit mix to adapt to the demand. At one of our facilities, we found 10-by-40s were getting higher rents than two 10-by-20s, so we removed the partition between units to convert them into larger spaces.
If our study indicates weaker performance compared to previous years, we may choose to forego our usual rent increases. Instead, we might offer lower pricing or more aggressive promotions.
3. Focus on Personal Service
The self-storage industry has put a ton of focus on automation and technology in recent years. While tools like mobile apps, Bluetooth-enabled locks, and artificial intelligence can enhance efficiency, nothing beats excellent customer service. At my company, we recently built our own call center instead of outsourcing to a third party. This approach ensures our tenants and prospects speak with representatives who understand our facilities, which leads to a more personal experience.
If customers feel valued and believe they’re getting a fair price, they’re less likely to look elsewhere. We’ve all been stuck on a call frustrated with wait times or had trouble getting a human on the line. Don’t let your self-storage prospects and tenants have this experience.
4. Check in With Your Staff
Even if you’re the primary person managing your self-storage facility, don’t forget to engage with vendors, maintenance staff or even third-party call-center employees. A simple question like, “Is there anything you think would improve our customer service or retention?” can yield valuable insight. Staff might be hesitant to share suggestions, but their frequent presence at the property means they often have a clearer perspective on daily operation.
As self-storage owners, it’s essential to leverage the knowledge and experience of our teams. Each of our employees has an annual review that includes discussing their compensation, but this is also an excellent time to discuss what they think will improve our business, too.
5. Carefully Review Your Expenses
In recent years, we’ve all seen costs escalate in the self-storage industry, particularly for things like business insurance. While I don’t ever look to switch providers for minor savings, I do consider changing vendors if it could save thousands, especially if it’s over multiple sites. I make it a practice to reevaluate my expenses annually and solicit quotes from new providers if I see the potential for significant improvement.
I’ve found that vendors can sometimes take loyalty for granted, especially if you’ve worked with them a long time. This can lead to unexpected price hikes. By comparing quotes from other suppliers, I often discover better rates, prompting my current providers to offer discounts to retain my business.
Sometimes, when reviewing my profit-and-loss statements, I’ve noticed items being billed or allocated twice. For instance, I once had a vendor who was charging us for a service we no longer used and thought we had canceled. Regularly reviewing every line items helps ensure we remain aligned with market trends.
When business is thriving, it’s easy to overlook certain aspects of your self-storage operation or focus on the next acquisition or development. By staying proactive and adaptable, you can ensure your facilities remain competitive and profitable in the evolving market landscape.
Charlie Kao is the principal of Twin Oaks Capital, a Michigan-based commercial real estate company specializing in self-storage and multi-family assets. Services include real estate brokerage, asset management, feasibility studies, consulting and construction management. The company and its affiliates have owned, operated or planned more than 1 million square feet of self-storage. Charlie also owns House of Kaos Real Estate School, which provides continuing education credits for licensed realtors. He can be reached at [email protected].
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