What You Need to Know about Self-Storage Upgrades and Renovation
With around 75,000 self-storage facilities operating in the U.S., there’s a growing number of sites that are aging with little to no maintenance or restoration. Each day, it’s getting harder and harder for these aging sites to compete with the brand new, class-A facilities. That’s why we’re giving you the 5 of the best tips for upgrading your self-storage facility.
1. New Facilities Can Benefit From Upgrades Too
Self-storage renovations and upgrades aren’t just limited to aging facilities. In fact, upgrades can benefit any site, new or old, by offering better solutions. From convenience and security to premium product offerings, there’s always a way to enhance your self-storage property and the customer experience. Need an idea? Here are some of today’s leading security products in the self-storage industry that can help better even the best of facilities.
2. Strive for an 80-85% Occupancy Rate
While the national average occupancy rate was 92% in 2020, it’s important to remember that the most successful facilities stay rented between an 80-85% occupancy rate. This is because when you’re rented above 85%, your running out of inventory and no longer have the leverage to make more money. You should always be assessing your self-storage facility and making upgrades to offer your tenants more secure and convenient solutions, so that you can offer premiums and increase rental revenue over time. Consider adding a robust security system or relocatable storage units to idle land to increase your inventory and charge premiums for smart units.
When you’re rented below an 85% occupancy rate, you likely have underperforming units and should consider a unit re-mix. Take a closer look into your most successful and unsuccessful units. Whether you offer different unit sizes, add boat and RV storage or re-skin a hallway to include wine or storage lockers, there’s likely a better way you could be serving your demographic area.
3. Take One Project at a Time
Tackling a total self-storage renovation can be overwhelming. Consider taking your renovation one project at a time to make life easier. If you have a multi-story facility, you can even take this one step further by completing your projects on a floor by floor basis. This gives you ample time to organize construction, work around tenants and notify them of any disruptions that may occur when visiting your site.
4. Don’t Leave Money on the Table
Many operators over the years have made the mistake of putting off repairs and upgrades to save money; however, the saying, “You’ve got to spend money to make money”, couldn’t be truer in the self-storage industry. Not to mention, outdated products such as security gates and unit doors are a huge liability and keeping them up to date is a must. Ask yourself, “Are you leaving money on the table?”. If you are, it’s time to upgrade those aging components to better the safety of your facility and enhance your customer experience. By offering more convenient and secure solutions to your tenants, you can start charging premiums and make more money.
Don’t forget about cost segregation when renovating your self-storage facility. This is a tax strategy that accelerates depreciation and reduces the amount of taxes owed. This method allows parts of your building to be depreciated on a 5, 7 or 15 year schedule instead of depreciating the whole building at 27.5 or 39 years with the straight-line method.
5. You Should Regularly Asses Your Facility for Upgrades
If you’re not regularly assessing your self-storage facility, making upgrades to increase security and convenience and increasing your rental rates, you’re leaving money on the table. The R3 Program at Janus International can help you improve the value of your facility, increase your NOI and earn you some great perks while doing it.