Republished with permission from List Self Storage Newsletter
By Ben Vestal
My calendar recently reminded me it was time to schedule my regular dental checkup. Although it can be an unpleasant experience, I scheduled an appointment because I want to avoid serious problems in the future. We all know it’s important to maintain our physical health, but how often do you assess the health of your self-storage business?
As long as the phone keeps ringing and units are rented, you may think everything is fine. However, when was the last time you took a good look at the operation of your property and how it stacks up against your competitors? Would you be prepared to handle a new rival in your market? Today, in the very competitive self-storage market, a facility checkup is a crucial exercise to ensure a healthy future for your business.
Several key indicators can help you determine the health of your local self-storage market and your own property. First, you should track the frequency of phone and Internet inquiries you receive and determine how many turn into paying customers. Compare those percentages to the previous months and even last year to see if your property has kept pace or if calls and conversions are declining. This could indicate that a more serious market condition is present.
How long has it been since you raised your rental rates? Did you lose customers as a result? If you’ve had trouble raising rates it may be another red flag. Keep a close eye on your economic occupancy if you’ve had to increase your concessions to keep your physical occupancy levels up. This may be a sign that your market could be in for some turbulence.
Luckily, you have access to one of the premier local experts—yourself! Take the time to evaluate your property against its competition using the following criteria:
- Location, access and traffic counts
- Signage
- Rental rates
- Cleanliness and friendliness
- Age of the property (Yes, it does matter!)
You’re the ideal doctor to run the checkup on your property and market because you have valuable local experience and knowledge not available to an outsider. However, you must be relentless in obtaining all the facts and impartial in evaluating the information you collect to make your assessment useful. You should also take the time to discuss your findings with a local broker. He’ll be able to give you an objective point of view and help you navigate the possibility of new competition in your market.
Ben Vestal is president of the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Argus provides brokerage, consulting and marketing services to self-storage buyers and sellers and operates SelfStorage.com, a marketing medium and information resource for facility owners. It also offers panel discussions in which brokers from around the country share their insights on self-storage market fundamentals and economic trends in their regions. To access recordings, visit www.argus-selfstorage.com/presentations.html. For more information, call 800.55.STORE; e-mail [email protected].