Managing Your Self-Storage Facility with Revolving Rates

When you are first opening a self-storage facility you want to make sure that your rates are competitive enough that you will be able to fill your self-storage facility quickly. You can’t raise rates on empty units. On the other hand, you don’t want a mass exodus because you raised the rates too quickly or too much. There is a perfect balance for getting your facility rented and keeping it rented.

You are going to use a revolving rates method. When your facility has a higher vacancy level, you are going to offer specials, lower rates, to get people to rent with you rather than your competition. The reason for this is that most people are not going to move everything once they have it situated over a few dollars rent increase. The idea is to get your unit filled when you are empty so that you have income.

Once your units are filled back up to your goal level, then you can raise the rates back up to market level. This means that you won’t be missing out on precious revenue, but you also won’t have empty units. By renting the units out at market level, you will have a higher rate of return as you increase rents.

Your rents should never stay stagnant. You should have your manager constantly watching your competitors’ rates and your own vacancy rates to find out where you should be pricing your units. You don’t want to be the facility with the lowest price out there. You don’t want to be the self-storage facility that is bringing the entire market down. You want to be one of the most valuable facilities out there. You can’t do that if you aren’t charging competitive rates.

Because rates are constantly changing, you need to monitor what your competitors are charging. As their rates go up, your rates go up. You all want to be priced about the same in order to keep your market strong. Make sure that your manager keeps a constant eye on the market so that you can stay competitive! As always, happy investing.