How much should I pay my managers? If I had a nickel for every time I was asked that over the last 15 years, I could almost build a 100,000-square-foot storage facility with the pile of silver!
The question isnt as simple as it sounds. Many variables come into play. We must look at what a manager is making in todays market, but also examine the past and see where weve come from in terms of wages, job description and manager profile.
When self-storage started in the 1960s, a 300-unit facility was quite a large investment, and operators were challenged to find managers. We generally hired retired people with a small income such as Social Security, installing them in one-bedroom apartments onsite. They used the peg-board system of maintaining rental records, and the rental office (if any) wasnt much larger than a 10-by-10 space. Managers were required to answer the phone, quote a price, write a simple rental agreement, collect the rent and keep the facility clean. For this, they were paid a few dollars and received free housing.
Things began to change in the 1980s. Self-storage had matured as a business and so had the size of our facilities. No longer was management a retired caretakers type of job.
Marketing was a word added to our self-storage lexicon along with telephone sales and technique. We became aware of the competitors in our area and the importance of answering the phone properly, selling, and turning calls into rentals.
We had to go outside of our comfort zone of Yellow Pages-only advertising and teach managers how to market a facility and services to the local community. Obviously, we also began to see the manager wages, bonus and benefit programs change as job duties expanded. In the early 1990s, a resident management teamhusband and wifewere making an average salary of $1,200 to $1,700 per month, exclusive of benefits.
Evolution
The self-storage industry saw a huge transformation in the mid 1990s. The general population began to take notice of self-storage along with Wall Street and investors. Our tradeshows ballooned from 500 attendees into the thousands we see today, and the industry continues to grow each year!
The world began to notice self-storage as well. With this change, self-storage became more sophisticated in terms of facility design and management profile. Some facilities no longer offered resident apartments for managers. Security had stepped into the limelight with advances such as door alarms, video surveillance, computerized gate access and climate-controlled units.
Our industry as a whole was becoming more professional, and that was reflected in management staff. Managers were increasingly computer literate, dressing in a more professional manner; offices were stocked with a retail center and the work environment was better designed. People were looking at a self-storage managers job as a career, not just an added supplement to their retirement income. Wages increased again.
Here and Now
Now that I have refreshed the memories of the old timers out there and educated the new kids on the block, lets take a look at manager wages today.
To determine if youre paying a fair market salary, we must first ask a few questions. Is your manager a single manager or part of a team? Does he reside onsite? Are the hours full time or part time? Do you pay an hourly wage or is the position salaried? Is the manager experienced or new to the self-storage industry? What are the job duties? Is your facility small, with fewer than 200 units, or in excess of 1,200 units?
All these factors must be considered.
Todays Base Salary
I consult with a lot of new owners and many are continuing to build resident manager apartments. These facilities typically have a management team profilea husband and wife who work full time. The resident managers can be paid either a monthly salary divided between the two employees, or an hourly wage.
Remember, just because you pay your employee a salary doesnt mean you can work them 80 hours a week. Nor can you factor the housing into their wage to offset any minimum wage deficiency. In other words, you cant pay your managers $1,800 a month and consider the housing to be worth $1,200, for a total of $3,000. The Department of Labor has said the provided apartment is primarily for the benefit of the owner, not the employee.
In todays market, were seeing base salaries of $2,800 to $4,000 monthly for a resident management team; sometimes the pay is more$1,400 to $2,000 per person, depending on location, facility size or income, management experience, job duties, etc.
In other words, for two people, the annual base salary is $33,600 to $48,000 per year. This doesnt include any benefit programs such as medical, dental or 401K retirement programs.
Perhaps you have other staff at your facility, most likely a relief team or person to relieve your full-time managers. These staff members would work two days a week, and command an hourly wage similar to that for office, maintenance and retail work. About $9 to $12 an hour is typical. They may receive some sort of bonus, perhaps a per rental incentive but wouldnt typically receive any other benefits.
Offsite Managers
Some newer facilities elect not to include a resident managers quarters, instead employing off-site management. These operators usually opt for single managers with a combination of full- and part-time employees. Managers duties are much the same as if they lived onsite, with the exception of no availability in the evenings to investigate tripped alarms.
The nonresident manager will almost always receive an hourly wage, normally ranging from $10 to $20, depending on whether he is a senior or assistant manager.
Facility size isnt always a dynamic in wages. Larger facilities may employ more staff members, with extra office help or maintenance people. Your facility should be open seven days a week whenever possible, with full-time managers not working more than five days weekly and a relief person or team working two days per week. Regardless whether you pay your managers an hourly rate or a salary, you should use a time clock or time cards to track time worked.
Do you have a letter of employment that spells out the managers job duties, hours and days of work, and your compensation package? Its a good idea, no matter if staff reside on or off property. With debt servicemortgage or loan payments and property taxesemployee wages will be your next highest expense.
Remember, a good manager with a proven track record is worth his weight in gold! Dont sell yourself, your investment or your tenants short by underpaying your management staff. Provide a clean and pleasant work environment, involve your staff in the annual budgetary process, ask for their input in the operations of the facility, give them authority, pay them a decent wage and design a goal-orientated, obtainable bonus program.
Youll keep your managers longerand theyll be more loyal and appreciative.
Who Is Todays Self-Storage Manager?
By Pamela Alton-Truitt
Todays self-storage managers are no longer retired caretakers. Theyre more proactive at their facilities; they go offsite and market, are more involved in their local community and have a younger mentality.
Some of these managers are in their 70s; theyve witnessed the changes in our industry, eagerly grasped them, and can run rings around 30-somethings. A vast majority of our managers are baby boomers. Newly retired from their first or second careers, they still want to stay active. Other managers are in their mid-20s and fresh out of college. Managers are coming from other fields such as sales or marketing, customer service or business management. With the proper training in self-storage, they can be productive in their newly chosen careers.
Being a self-storage manager is like being a manager at any other retail business; we now offer retail items and are using customized computer software specific to our industry. Managers residing onsite may have children and many have pets. Some younger managers may have even grown up at a storage facility, learning from their parents who managed a facility. Todays managers are more than mere caretakers or baby sitters. Unafraid of the words marketing or telephone sales, theyre more aggressive in their collection efforts and state lien sales procedures.
As our industry grows, I think we will see younger people enter the management field. Self-storage is not only a real estate investment but a resale business. As such, our management profile continues to be professional and sales orientated.