Have you considered hiring a third-party management firm to oversee of your self-storage property? Whether you’re just breaking into the industry or a veteran, outsourcing facility operation can help you optimize performance, maximize revenue or simply be more hands-off with the business.
As in marriage, the secret to success is choosing the right partner for your specific needs. Not all providers are the same. For a thriving alliance, it’s important to feel comfortable with the company you choose.
Following is advice for vetting potential management firms. First, I’ll discuss the benefits of hiring such a company and the services it can provide.
First, a third-party management firm may have more capabilities and talent to raise the value of your asset than you have on your own. A company that focuses solely on self-storage operation can act quickly when the tides change in your market. Often, it has proven, data-driven strategies it can implement through proper tools and resources.
In addition, a management company will consistently monitor all your expenses and compare them to those of similar properties to help increase everyone’s cost-savings. These firms often use economies of scale to decrease expenditures across the portfolio for utilities, advertising, marketing, call-center services and other necessities.
There’s a broad spectrum of services a management firm can offer. In addition to general property management, a full-service company handles facility marketing, revenue management, training, financial reporting and accounting. Specific items it might handle include:
- Assisting with design and layout of the front office
- Adjusting unit mix
- Developing rental agreements and forms
- Establishing policies and procedures
- Establishing and executing a marketing plan
- Integrating computer software and hardware
- Setting and managing rates for new and existing customers
The firm will also take responsibility for human resources, which includes staff hiring, firing and development. It often has a network of storage managers and a team of experts to support and train them. A management company may keep your current employees or could bring in its own trained staff. This is a question you should always ask during the selection process.
There are management companies that provide à la carte services as well, which allows you to simply fill in knowledge gaps where necessary. Consider the full scope of services required.
The Selection Process
Your choice of management firm should be based on the level of engagement you desire and the fee structure that works for your budget. It must be a good partnership for both sides. Some companies don’t allow the owner to make decisions or have any involvement after signing the contract. Others permit the owner to be involved in some day-to-day operation and will consult on major decisions.
Consider how often you want information about your business. Some firms will provide details, others just an overview of important items. Some will send data on a set schedule. These things are usually based on your preferences.
You’ll also need to decide if you want to keep your brand name or operate under the management company’s brand. Some firms will give you the choice, others won’t.
Here are some additional things to learn during the vetting process:
- Does the company have a clause in its contract that prevents it from managing other facilities within a certain distance of your property?
- How is the organization structured?
- Does the managers’ direct supervisor make regular visits and stay in constant communication?
- What reports will you receive?
- What’s are the cost structure and management fees? Are other fees directly passed through?
- What marketing strategies does the company employ?
- Are operational strategies tailored to your occupancy and demographics, or is it a one-size-fits-all approach for all facilities in the company’s portfolio?
- What kind of staff training does the company provide?
Research each company’s track record and speak to references. Often, a candidate will provide case studies of managed facilities as well access to previous and current clients.
Being open and honest about expectations on both sides of the partnership can lead to great success. Understanding the scope of services involved and the level of engagement you can have as an owner is also essential to making the right choice. Whatever your needs and preferences, a third-party management company can help improve the value of your asset.
Melissa Stiles is director of marketing for Storage Asset Management Inc., where she’s responsible for the direction of marketing for the company and its 120-plus managed facilities. This includes the development and execution of local marketing plans, digital marketing, social media, advertising, public relations, and special events. She’s been a frequent presenter at state and national industry tradeshows. For more information, e-mail firstname.lastname@example.org; visit www.storageassetmanagement.com.