All Forum Posts by: Faith Hill

@Vincent Chen Hi there! That is a complicated question that depends on the facility itself and your investment strategy.  

Regarding size, we knew that we intended to run the facility remotely so the facility needed to bring in enough revenue to hire quality on-site staff.  At 158 units and a mobile home, we have enough revenue to have two part-time employees who are doing a wonderful job for us.  

Regarding value add projects, certain systems needed to be in place for us to remotely operate the facility in the way we envisioned (e.g. video cameras with remote access, automatic gate, website with online payment capabilities, etc.). So that dictated how we prioritized capital expenditure projects in the beginning. 

@Wes Eaves Yes, we bought our first facility through a broker, but direct mail and cold calling is also effective.  Most recently, I've been cold calling self-storage owners to generate leads.  The key is to be consistent with whichever method(s) you choose!

@Peter Lee Congrats on your recent acquisition! We took an incremental approach very similar to @Lance Langenhoven.  Since we are in a market that has very low household income (the lowest in the state), we wanted to be sensitive to the demographics of our customer base.  

We first made obvious improvements to the facility - added an automatic gate, cameras, new website - and then we started tackling rent raises on units that were the furthest below market rate and/or the oldest tenants.  We sent a rent increase letter to our customers in advance highlighting the improvements we made to the property.  We saw very few move-outs as we were still the most affordable in our market.  

We still review every 6 months and tag units for rent raises accordingly.  The ultimate goal is to eventually start using our management software to automate annual rent increases.  

@Rafael Ortiz  Congrats on your recent acquisition!  

We use Storage Commander for software management at our facility, and we've had great experiences with their customer service.  They always respond same day to any questions we have.  Their software also integrates with our website and payment platform so customers can pay through the website.  We also just added insurance as an offering, and they were able to seamlessly set that up in our management software.  Definitely give them a look!
 

@Ari S.  Thanks for sharing that perspective!  It will be interesting to see if people moving out of densely populated cities becomes a long-lasting trend, and if so, seeing where are they moving.  As there may be sustained population growth in those areas, there may be increased demand for storage.  

@Caleb Heimsoth Lol, I second that! If someone is guaranteeing no risk whatsoever in a particular investment class, that is a huge red flag.

@J-P. Pesare True! With all of the new construction from REITs and savvy operators who have expanded on their facilities, there are certainly some major markets where there's a risk of oversupply.  I am in a market where I do not (yet!) compete with REITs.  There are still deals out there for beginner investors not afraid to look in secondary and tertiary markets and/or to take on an underperforming facility to add value.

RV/Boat storage is great! We are looking into expanding our RV/boat spots as we have several acres of undeveloped land. I agree that detailed analysis is very important as there are numerous factors (such as local demand, the cost of county approval, land prep, gravel cost, labor, etc.) to consider in determining if the ROI is ultimately worth it - especially since in our market, RV/boat spots command lower rent/square foot than a storage unit.

@Mike Krieg I really appreciate your comment as I think that recession "resistant" is a more tempered and realistic description of storage investments rather than saying recession "proof."  It's important to not paint an overly optimistic picture of any one type of investment as all come with some level of risk.

@Dylan Kennedy

You are absolutely right that these are unprecedented times.

We are seeing similar customer behavior as the SS operator you mentioned.  Not nearly as many move-outs.  I suspect that moving stuff out of a storage unit that they haven't seen in 6 months is probably not the top priority on people's minds right now.

@Will Fraser Thanks so much for your comprehensive and thoughtful response.

I absolutely agree that every economic situation is different depending on what triggered the downturn, so I am continuing to watch and monitor how things progress in this current, ever-changing environment. Hopefully no Zombie Apocalypses are in our future!