Do you want to know the skills that will help you build a successful self storage business? If YES, here are 8 skills to take note of.
Self-storage businesses are known to make storing personal belongings quite easy for people. These businesses also cater to other businesses who need storage space for equipment like office supplies, furniture, and more. The lack of space in homes and offices, and the desire to be able to store and forget about items are the driving forces behind self-storage businesses.
Note that the ideal customers for self storage businesses are individuals that have a longer-term need for storage, such as a military member who is on active duty outside the United States.
These businesses generate income via monthly rental collections, auction proceeds from past due accounts, fees, and sales of related products such as moving supplies and locks. They also make extra money from administrative fees, lost key fees, lock removal services, late fees, and other fees, in addition to the normal rental fee structure.
Note that some self storage businesses also charge a premium rate for the rental of storage spaces in a climate-controlled building. Others offer insurance, for an additional monthly premium, to insure the contents of the items placed in a storage space.
Meanwhile, have it in mind that this business is only ideal for individuals who enjoy working with people and are excellent when it comes to tenant relations. It helps to have simple maintenance skills to fix some of the things that may need repairs. You should be able to use a ladder to change light bulbs and be able to keep the place painted nicely.
However, no matter what your professional goals are in self storage, if you’re looking to start and run this business successfully, here are skills and experiences you are expected to possess.
Skills and Experience That Will Help You Build a Successful Self Storage Business
Have it in mind that not every owner, manager or everyone who is hired to work in self storage has industry experience. Some are there based on their amazing ability to have rapport with customers and some are there for other reasons entirely, few of which might have nothing to do with self storage experience.
Notwithstanding, the one thing all of these individuals are expected to eventually have in common is industry knowledge. Note that you can take your time to improve or get ahead by learning even more than just the self storage basics.
Carefully note a colleague or manager who has been in the business for a while and ask questions. Log on to a self storage forum and ask questions of your peers. Read up on self storage news, trends and in-depth articles. Having industry knowledge (and staying up to date on it) will make you an intelligent and desirable candidate.
The Ability to Find Projects
For most of Self storage businesses, this requires developing relationships with self-storage brokers who work in the area of the country where you are.
Know these people. Meet them. Talk to them. Help them look good to their clients and you’ll get deal-flow for a long time. How do you do that? You can only do that by becoming a buyer! Then, how do you become a buyer? By knowing how to source for leads and projects!
A good number of self storage owners or managers already think that they know more than enough about customer service. And ten years ago, they might have been right. But in this modern age, coupled with the proliferation of online reviews, every industry is expected to be a customer service based industry. This is especially true of self storage.
You will have to brush up on your own customer service skills by making sure that you greet customers in person and on the phone in a friendly manner, by thinking of a few ways to wow tenants and by asking a manager or co-worker for honest feedback on your customer service skills.
The Ability to Analyze the Financial Viability of Opportunities
It has never been more imperative to be able to analyze a prospective deal and project the future cash flow of new space coming online. How much you can pay for a facility today is determined by understanding:
- The projected future cash flow of an expansion
- The cost of building the expansion
- The operating cost of the expansion
Then, owing to those future cash flows, you back into what you can pay to get them. One unique benefit is there’s a lot of training out there to acquire these skills. The industry offers support to new investors via free and paid programs, and there are experts you can tap as well.
Have it in mind that the self storage industry is built on change. Notably, these rapid changes occur in day to day operations—things like tenants moving in and out and employees coming and going. Also note that these changes may occur in big picture ways through the form of new technology and industry trends. One of the smartest things you can do to move forward in your self storage career is embrace industry changes.
Your Abilities Around Construction
In this industry, for the small investor to get the returns needed today, it almost always has to be a value-add project. The best way to create a value-add situation is to find a smaller “mom and pop” facility, expand it, and bring it up to today’s “institutional” standards.
Note that it almost always requires the ability to construct more storage. That doesn’t mean you have to build it yourself, thank goodness; but you do have to know:
- What the construction process involves
- The approximate cost
- When construction will start
- How long it will take
- What the income looks like as it leases up and when it’s stabilized
- how you will facilitate the construction
- Will you hire a general contractor or a construction manager, or will you do it yourself?
You need to know this upfront so you can run your financial analysis.
Note that owners, managers or employees who are creative problem solvers are the ones who stand out from the pack due to their ability to think of new ways to conquer existing hurdles. As the saying goes, the definition of insanity is doing the same thing over and over again and expecting different results.
- Can you think of a problem at your storage facility that won’t go away?
- Can you think of a current procedure at your storage facility that is more of a short term fix than a long term solution?
It is imperative you start identifying these situations and brainstorm new solutions. Your ideas might not all be winners (Or maybe they will be!), but your willingness to think creatively will be noticed.
To succeed in this business, you have to extensively understand the importance of communication in the workplace. In the self storage business, this translates to staff communicating information with tenants—things like missing rent payments, changes in facility hours of operation and other relevant updates. This also means staff communicating with each other on policies and procedures.
To venture into the storage business today does take more skills than it used to, but they’re not hard to learn. It is imperative you do the work required and stand head and shoulders above the others who are also trying to get a storage venture off the ground. If you lay the groundwork, you can build a successful business and start creating the wealth this product offers.