Table of contents
- Self Storage Property Management Definition
- Independent vs Third Party Management
- How to Successfully Manage a Self Storage Facility?
- 20 Common Self Storage Property Management Services
- 9 Important Self Storage Property Management Ratios and Metrics
- Self Storage Property Management Fees
- Self Storage Property Management Software
- Self Storage Property Management FAQ
As the self storage industry has grown from a once cottage industry to a highly sought after investment class of its own, so has the management practices of these facilities. Given the simplistic nature of this type of rental property, the distinguishing success-factor of a property usually comes down to how well the storage facility is managed. Below we take a deep dive into everything you need to know about managing self storage rental properties.
Self Storage Property Management Definition
Self storage property management is a specialized type of real estate management that deals with the comprehensive oversight of self storage properties such as drive up and indoor climate-controlled facilities.
Independent vs Third Party Management
When it comes to managing self storage properties, investors have two primary options: independent or third-party management. Independent management allows property owners to maintain full control over operations, implementing their own strategies and systems, but requires a substantial investment of time and resources. Third-party management firms provide specialized expertise and resources, often improving operational efficiency and profitability, while freeing up owners to focus on larger investment strategies or portfolio expansion.
How to Successfully Manage a Self Storage Facility?
Self-storage property management can be challenging. However, with the right approach and an understanding of the fundamentals of the business, you can successfully manage your self-storage facility – or hire the best possible person or company for the job. Here are a few tips to get you started:
1. Keep your facility clean and well-maintained. This will not only make it more inviting to potential customers, but it will also help to prevent problems down the road.
2. Be proactive in your marketing. Don’t wait for customers to come to you; go out and find them. Use online and offline property marketing techniques to reach your target market.
3. Offer a variety of storage unit sizes. This will give customers the flexibility to choose the unit that best meets their needs. From indoor climate controlled units, to outdoor vehicle parking spaces.
4. Stay organized. This is key in any business, but it’s especially important in self-storage. Keep good records of your customers, their contact information, and what they’re storing. Proper organization will also save you time and headaches down the road.
5. Offer excellent customer service. This is what will keep customers coming back to your facility. Be friendly, helpful, and accommodating, and you’ll build a loyal customer base.
20 Common Self Storage Property Management Services
Each self storage rental property will require its own unique set of property management services to be successful.Whether you are self managing or outsourcing to a third-party management company, there are several common services found in place among successful self storage properties. Below we take a look at some of the most common self storage property management services:
- Facility Operations: This involves overseeing the day-to-day running of the storage facility. Keep good records of your customers, their contact information, and what they’re storing.
- Rent Collection: This involves collecting rent payments from customers and managing accounts.
- Tenant Customer Service: Handling customer inquiries, complaints, and providing support as needed. Friendly, helpful, and accommodating staff, builds a loyal and returning customer base.
- Lease Management: Managing new lease agreements, renewals, and terminations. This can also include reconciling security deposits upon move out.
- Maintenance and Repairs: Ensuring units and facility infrastructure are maintained and any necessary repairs are carried out promptly. This creates an inviting environment to potential customers, and also prevents deferred maintenance problems down the road.
- Security Management: Providing security measures like surveillance cameras throughout the property, smart locks, access control systems, and potentially security personnel.
- Climate Control Management: Maintaining property utilities to ensure appropriate temperature and humidity levels in climate-controlled units.
- Inventory Management: Keeping track of vacant units and rented units to determine which ones are the most in demand and profitable.This also includes unit variety demand monitoring, from indoor climate controlled 5’x5’ units, to outdoor vehicle parking spaces for rent.
- Marketing and Advertising: Promoting the property to attract new clients, which can include online marketing, local advertisements, or partnerships with local businesses
- Online Booking Management: Managing reservations and payments made through the company’s website or other online platforms.
- Financial Reporting and Analysis: Providing regular property financial reports and conducting performance analysis.
- Legal Compliance: Ensuring all operations at the property comply with local and national regulations.
- Insurance Management: Assisting customers with storage insurance and managing claims in case of damage or theft.
- Cleanliness: Ensuring all public and storage areas are clean and well-maintained.
- Access Control: Managing the system that controls customer access to the facility and individual units.
- Price Management: Setting competitive prices among local competitors and managing discounts or promotions.
- Technology Integration: Implementing and managing technology such as online booking systems, digital payment platforms, and security systems.
- Move-In and Move-Out Coordination: Helping customers during the move-in and move-out process, which can include providing carts or moving supplies.
- Emergency Planning: Having plans in place for emergencies such as fires, floods, or security breaches.
- Pest Control: Regular inspections and pest control measures to maintain a clean, pest-free environment.
9 Important Self Storage Property Management Ratios and Metrics
Analyzing key metrics and ratios helps self-storage facility owners and managers understand their business performance, identify growth opportunities, and make informed operational and strategic decisions.Below are some key metrics and ratios commonly used in the self-storage industry:
This is the percentage of rented units or rented square footage compared to the total available. It’s a key indicator of how well the facility is being utilized.
Revenue per Available Square Foot (RevPASF)
This metric provides insight into how effectively a facility generates revenue per square foot of available space.
Revenue per Occupied Square Foot (RevPOSF)
This shows how much revenue is generated per square foot of rented space. It’s similar to RevPASF but excludes vacant space from the calculation.
This is the percentage of tenants who are late on their rent. A high delinquency rate can indicate problems with the tenant base or the facility’s rent collection practices.
Customer Acquisition Cost (CAC)
This is the total cost of acquiring a new customer, including marketing expenses, divided by the number of new customers acquired.
Customer Lifetime Value (CLV)
This is the total net profit that a facility expects to earn from a customer over the duration of their relationship.
This is the percentage of units that become vacant during a certain period. High turnover might indicate customer satisfaction issues
Average Length of Stay
This measures the average amount of time tenants rent their units. A longer average stay often means lower turnover costs and more stable revenue.
Rent Growth Rate
This shows how much rental rates have increased over a given period, a key indicator of revenue growth.
Self Storage Property Management Fees
The fee to manage a self storage property can range between 5% and 8% of the gross rental income, depending on the type of self storage property (i.e. outdoor drive-up vs indoor climate controlled). Contracts to manage self storage properties are often structured as a “percentage of revenue” or “cost plus” where the property management company is paid base fee as well as percentage of on revenues.
Self Storage Property Management Software
Effective management of self storage facilities is now primarily done via self storage management software. This software helps owners, managers, and customers handle virtually all aspects of administration such as payments, vacancy management, and operational reporting. Some of these property management software providers even have begun providing true end-to-end support with offerings such as facility websites and access control.
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Self Storage Property Management FAQ
Self Manage or Hire Third Party Management?
When managing self-storage properties, owners face the strategic decision to either self-manage or hire third-party management. Self-management, whether it’s maintaining on-site employees or remotely managing via technology, can allow for more control over operations and potential cost savings, but demands considerable time and hands-on involvement. Opting for a third-party management company, on the other hand, provides the advantage of industry expertise and established operational systems, often driving efficiency and profitability. The choice between the two can significantly impact the property’s performance, return on investment, and overall growth potential in the self-storage market.
Top 10 Self Storage Operators in United States
The self-storage industry in the United States comprises numerous operators (managers), ranging from small, independently owned facilities to large, publicly-traded corporations. These major players often differentiate themselves through factors like geographic coverage, services offered, and total square footage managed. The following list presents the top 10 self-storage operators in the U.S. as of 2021, ranked by the total square footage they control, highlighting the key industry leaders in this space.
- Public Storage
- Extra Space Storage
- Life Storage (formerly Sovran Self Storage/Uncle Bob’s)
- National Storage Affiliates Trust
- Simply Self Storage
- Metro Self Storage
- SmartStop Self Storage
Where to Market a Self Storage Property?
Identifying the right channels to market a self-storage facility can significantly impact its occupancy rates, revenue, and investment potential. Traditional advertising methods, such as print publications, signage, and community events, still hold relevance in certain markets. However, digital channels, including a robust website with online booking capabilities, search engine optimization (SEO), social media, and targeted online advertising, are becoming increasingly important to reach a wider, tech-savvy audience. Furthermore, partnerships with local businesses and real estate professionals can also be effective in driving visibility and customer referrals.