First, consult with your local taxing authority to find the steps you need to take to get the process started. Don’t expect a lot of help, but they will provide the forms and the process for you. Not sure of the process, you can hire a tax consultant that will do the job for you at about 30% of your savings. The process is not that time consuming or difficult. I did it myself. I don’t want to give away 30% of my savings. (see expenses) File your forms, explain why you believe your tax is excessive and continue to appeal until you have your reduction. It’s important to remember that every dollar you save on property taxes increases your property value. 5,000 savings will increase value 50,000.
2) Operating expenses.
Whether you operate your facility yourself, have a manager or use a property management service, there are ways to keep your expenses in check. I realize you probably monitor your expenses but have you looked at these items? Do you receive quotes from different insurance providers every year? I do and I compare them and let each of them know what their competitor is offering to see if they can match it. How about landscaping and snow removal? Do you have to have the grass cut every week or the snow removal when it only accumulates a couple of inches. What about your marketing? Are you heavily involved in print media, coupon books, yellow pages, etc. Do you have a web presence? In this day and age Yellow pages have become updated, so have coupon books to some extent. Self storage is not something people plan for, it’s usually an immediate need. A web site and a web presence will draw more calls for a lesser amount than the old media types of marketing.
3) Make Repairs.
People will and do judge the security and comfort of your facility by it’s appearance. Make sure your fencing is in good repair. Your doors should work easily when opening and closing. Remove weeds from your gravel or paved areas. Have yearly preventative maintenance done. This will save a considerable sum when a repair does need to be made. Working lights convey safety. Show the pride of ownership in your facility.
4) Ancillary revenues.
Do you sell boxes, locks, tape or other moving supplies? Why not make your facility a one stop shop. Do you offer renter’s insurance? It’s amazing how many people become interested in insurance when it is explained to them. Truck rental? People need to be able to move things, not just to your self storage facility but from one side of town to another. Or they are moving to another city or state. They need a rental truck. Notice how many are on the road everyday? There is a need, why not add that service. Do you have room for a billboard? Check your local laws and see if it’s allowed.
I know there are some owners out there that love to have people pay late so that they can collect more money. Consider this though, let’s say that your usual monthly delinquencies are 12%. If you reduce this to 5% you will have a manager (or yourself) that has more time to show units, work on marketing and not wasting time chasing money. If they don’t pay, move quickly on your lien rights and reclaim that unit so that you can rent it again.
6) Raise rents.
If you are at least 90% occupied, you should raise your rental rates. A modest increase of 2.00 a month on 400 units brings in another 800.00 a month or 9600.00 a year. Most tenants will not be irked by a 2.00 increase, so the chance they move out is reduced. If they do move out, now you have a unit to rent at the new rate.
This one is pretty simple. If you have the acreage and are at least 90% occupied, it’s time to expand. If you are not sure about expansion, it doesn’t hurt to go ahead and get the municipal approvals needed so that when you do make the move, this is out of the way for you.
8) Be aware of your unit mix.
What size units do you rent on a regular basis? Is there a size that doesn’t rent well? If it’s a 5 x 10 that doesn’t rent well and 10 x 10 units always rent, why not move some walls and make those 5 x 10’s into 10 x 10’s. If you expand, it is doubly important to make sure you understand what your potential client is going to want or need.
Self storage is a fun, interesting business that can be a smooth enterprise providing you take the steps necessary to run your business efficiently.
About Kevin Rollings & Self-Storage Facility Management
Kevin R. Rollings is a Teacher, an Owner and an Operations Manager for Self-Storage Facilities! Kevin has over 25 years rental experience at various levels of management and ownership in the rental niche.
Kevin was the regional supervisor for Scott Meyers, the past owner of Alcatraz Storage’s in the Indianapolis Greater Areas. Kevin was often a speaker at Scott Meyer’s Self Storage Academy as the key speaker for Management 101 and for Self Storage Auctions. His wisdom and excitement for the industry lead Kevin to purchase Alcatraz Storage in Brownsburg, Indiana, moving him from a once manager to a current owner!
For more information, please visit: http://selfstoragefacilitymanagement.com/