Storage units in next town over?

Question

Michael Wagner · Answer

20 minutes is nothing. I own two facilities. One is an hour away and the other is 20 minutes away. The 20 minutes away is a piece of cake to operate from my cell phone. I don't do any office hours. Even if I get stood up for a move in, I just look at the trip as a needed one to keep my eyes on things and do a lock audit etc. Sitelink is good but also expensive, you can develop your own system for remote move ins using other less expensive software. For example, you get a call for urgent move in but cant make it there. You take there info over phone and put it in computer, email them paperwork that they print and then leave in your drop box while they are moving in. You take credit card over phone for first month and you are good to go. You can also hide a few new locks on site so that you can sell that to them. we put them in a box labeled rat poison so they dont grow legs. 20 minutes is NOTHING! If its a deal, go after it and fast because storage deals dont last long once listed.

Do you have any experience in SS? Or real estate in general? If so, you will find storage much easier by comparison. Check out my blog here on BP, "All Things Self Storage" and let me know if I can be of any further help.

GOOD LUCK!!!

Do you have any experience in SS? Or real estate in general?  If so, you will find storage much easier by comparison.  Check out my blog here on BP, "All Things Self Storage" and let me know if I can be of any further help.

GOOD LUCK!!!

Scott Meyers · Answer

He Bradley,

We love the Asset Class, so welcome to the wonderful world of Self Storage.

I'll answer this 2 ways:  1.  Our first facility was easily 20 minutes away, but we hired a manager.   Regardless of the size, you need to hire someone to do the day to day management.   If that's your wife, so be it - but I suggest you follow Michael Gerber's Rules - Systems run the business, you manage the system.  You're an Investor, not a $12/hour Self-Storage Manager.

2.  We own 11 Facilities now, and closing on 3 more in the next 60 days.  NONE are in my own state.  We hire property managers or property management companies to run them.  No Sense of urgency with tenants toilets, etc.....   JUST STUFF!

We use Site Link - My $.02 - it's the most robust, and it integrates with a kiosk, and you can create a responsive website that allows you to rent units online without need for a manager to be onsite.

Michael Wagner · Answer

Your instincts are right....Industry standard is to operate at 88%.  Of course they may operate higher than that which is a good indication that rent raises are appropriate. Income verification is easy.  You just compare what you are being told to what their income taxes say.  You will also look at the rent roll which will tell you what each unit brings in and if it is occupied or not.  These things are usually fully vetted AFTER you get it under contract.  Just be sure that the seller understands that any offer you present is based and contingent on the numbers they provided and if the actual performance is not as presented, then adjustments will be needed.  ON the flip side of this, you do need to understand that some "adjustments" between actual revenue and costs might occur before hitting the tax return....for example, if they have $5000 in internet and cell phones to operate the facility, you will need to believe them when they say they "wrap" that into the business....we all know it doesnt take that many cell phones to run a facility but if the IRS will allow it.....you get the idea. Same can be said for cash income but that is something you have to decide on how to handle.  I dont think a seller should get "full credit" for cash income not reported to IRS but insisting they get "NO" credit, might cost you to lose a deal worth getting!

Good Luck

Vlad Kolbas · Answer

Hi Bradley, as Michael said 20 minutes is really not far away. I own two self-storage facilities with 77 and 10 units each and they are 45 minutes away in another small town. We keep one unit of each size unlocked with the rental agreement in the unit. When someone calls I give them the unit number to check out. If they are interested they fill out the agreement, take a picture of it and text it to me (includes payment information). Then they drop off the completed agreement in a drop box. No need to drive over there and meet the new customer.

For software I use WebSelfStorage web app by U-Haul. It's only $45 per month and does everything for me (auto-pay, mailing letters, integrates with Quick Books, etc.). There are many other options for software, don't spend too much.

My business partner drives over there once per week just to check things out and pickup rental agreements and some rental payments (trying hard to get everyone on auto-pay but not there yet).

This is in a small town of around 7000 people and it works well for us.

Denise Evans · Answer

We always used SiteLink, and loved it. Well worth the money for ease of use, stability, reporting, and the hidden audit flags that let you know if an employee is doing something funky.  We came out of another environment with complicated tenant management software, and it was always a battle cleaning up mistakes made by employees, especially if there was high turnover in a position. SiteLink is pretty much bulletproof.  Depending on the size of the facility, you might also want to look into a kiosk for new customers and other on-site customer assistance matters such as lock outs and payments. Does it have electronic gate locks? Does it have individual door alarms?  Do you have at least camera so you can check things out from home when an alarm goes off, or someone calls with a site problem?

Storage units in next town over?

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