Cubix Insights

Self-Storage Management: Top Ten Challenges and Pro Tips

There are currently more self-storage facilities in the United States today than there are Mcdonald’s and Subways combined. And as the industry continues to explode, so does the competition.

To stay ahead of the game, you need to know the biggest challenges when it comes to managing a self-storage facility—and how to overcome them.

Whether you are a new owner of an existing facility, building or expanding a facility, or buying or selling a self-storage business, navigating the complex world of self-storage management can be tough. 

Here’s a look at the top ten challenges faced by self-storage facility managers, plus provide practical tips and strategies to help you break away from the pack: 

1. Management

Managing a self-storage facility is a complex and demanding task that requires marketing and sales expertise, tenant management, staff management, and more. 

According to a report by Storage Cafe, the self-storage industry has built additional 252.3 million square feet of storage space over the past five years, and the industry’s value is projected to reach $89.94 billion by 2028. To stay ahead, facility managers need to adapt to changing market conditions and competition to maintain a competitive edge.

• Effective time management is essential to balance the responsibilities of the facility and the office. To overcome this challenge, you or your facility managers need to prioritize tasks and create a functional schedule to manage time effectively. 
• Effective staff management is another essential component of effective facility management. 
• Managers should hire qualified staff, provide proper training, and manage their schedules effectively. 
• Outsourcing tasks such as accounting and marketing can save time and increase efficiency. 
• Training staff to handle conflict resolution and customer service effectively is crucial for maintaining a positive relationship with tenants.

According to LinkedIn, outsourcing accounting tasks can save time and money while ensuring compliance with financial regulations. 

2. Digital Marketing

Effective digital marketing ensures that your self-storage facility stands out from the crowd. The most effective digital marketing strategies for the self-storage industry include: 

• Search engine optimization (SEO)
• Pay-per-click (PPC) advertising
• Social media advertising
• Map listings & directory
• Aggregators & online reviews
• Email marketing

Your facility can also implement referral programs, direct mail campaigns, public relations, community events and sponsorships, and in-person sales and marketing tactics to effectively reach potential customers. 

In addition, you must track and analyze marketing data to optimize marketing strategies and increase revenue.

3. Accounting

Accounting is an essential aspect of managing a self-storage facility. 

According to Market Watch, the industry was valued at $58.28 billion in 2023. However, proper accounting can pose some unique challenges for facility owners.

These are the things you need to get right:

• Bookkeeping and record-keeping are critical for managing financial records accurately.
• Maintaining precise records is essential to avoid legal and financial issues. 
• Managing revenue and expenses can be challenging, and managers need to balance rental rates and occupancy to maximize revenue while staying competitive in the market.
• Tax compliance can be complicated, and managers need to keep up-to-date with tax laws and regulations.

To make sure your accounting needs are met you must utilize accounting software and/or hire a professional accountant to keep accurate financial records. 

Cubix Asset Management offers accounting solutions to any investors, entrepreneurs, and facility operators seeking to optimize the financial performance of their self-storage facilities.

Cubix provides comprehensive financial reporting and analysis, including monthly reporting of full financial statements, payroll setup and maintenance, accounts payable management, cash monitoring, and many other accounting services.

Learn more about our financial management solutions and how we can help you achieve your financial goals.

4. Cost Reduction

Self-storage facility management requires effective cost-reduction strategies to minimize expenses and maximize profits. Skilled and experienced self-storage management companies can help identify areas for cost-cutting without compromising service quality. 

According to ISS, energy, maintenance, staff, and insurance costs are significant expenses that managers need to find ways to minimize. 

Here are a few opportunities for cost savings: 

• Install energy-efficient lighting and heating systems to reduce energy costs. 
• Complete regular facility inspections and maintenance to help prevent costly repairs.
• Outsource tasks, such as accounting or marketing, to reduce staffing costs. 
• Compare rates on insurance policies and shop around for the best deals to reduce insurance costs.
• Cost Segregation studies with the goal of reducing income taxes through accelerated depreciation expense
• Property taxes coordinate appeal of the County assessments of your property’s tax basis

In addition, implementing cost-effective marketing strategies, reducing labor costs through efficient scheduling, and optimizing maintenance and repair processes to avoid unnecessary expenditures can all contribute to effective cost reduction. Making these cuts now can ensure that the facility remains profitable in the long run.

5. Sales Generation

Sales generation is an essential aspect of running a successful self-storage business. 

However, attracting the right potential customers and converting them into paying ones can be challenging. An effective marketing strategy that includes both online and offline channels will help in generating quality leads. 

To help with this, leverage social media platforms to improve visibility, implement top-notch customer service, and offer competitive pricing.

• Implement a competitive pricing strategy that attracts tenants. At Cubix Asset Management, we partner with self-storage facilities to create dynamic, competitive pricing based on local supply, demand, and competitor rates. We can help you stay nimble and on self-storage pricing trends using real-time data to maximize revenue.
• Develop an effective online and offline marketing strategy that stands out from the competition.
• Create a fast and friendly e-Rental experience and streamlined eCommerce workflow integrated with property management software.
• Create a culture with a high standard for customer service to effectively handle complaints and issues with a premium call center.
• Offer a referral program to win over new customers and build loyalty with current customers.

Learn more about boosting occupancy using multi-marketing strategies here.

6. Facility Management

Facility management is the backbone of any self-storage business. 

Managers must ensure that tenants have a safe and secure storage space, and the business operates at optimal efficiency. However, some challenges still persist in the self-storage industry, including maintenance, security, and unit mix. 

• Managers need to regularly inspect and maintain the facility to prevent costly repairs, implement security measures such as access control and video surveillance, ensure that climate-controlled units are functioning correctly, and regularly review and adjust the unit mix to meet the needs of tenants and maximize revenue.
• The unit mix of a facility is crucial to maximizing revenue and meeting the needs of tenants, and managers need to find the right balance between unit sizes and types to accommodate various storage needs. 

A professional facility management company can help alleviate the burden of facility management and ensure the facility operates at peak performance. Cubix Asset Management offers an all-in-one storage management solution that includes best-in-class facility operations management. Learn more about the services offered here.

7. Inflation

Inflation is a challenge that can impact self-storage facilities by increasing operating costs and expenses, causing a reduction in profitability. 

According to YCharts, the U.S. inflation rate was 4.98% in March 2023. Self-storage management companies must find ways to manage expenses effectively without sacrificing service quality to maintain profitability.

Rising costs in utilities, taxes, and insurance are some of the most common areas that affect self-storage facilities. 

You can stop inflation, but here’s what you can do: 

• Explore cost-saving measures like energy-efficient lighting, regularly inspecting the facility to avoid costly repairs, and comparing insurance policies to find the best rates.
• As we mentioned, pricing is a crucial factor that managers must consider to attract tenants and increase revenue while remaining competitive. 
• Managers should research the market and competitors to determine the right pricing strategy. Rental rate increases can be a sensitive issue for tenants, so managers should communicate the reasons for any possible increase with tenants.
• Economic uncertainty can cause fluctuations in demand and revenue, making it challenging to forecast and plan for the future. Managers can maintain financial stability and prepare for economic uncertainty by creating contingency plans.

Partnering with a skilled self-storage management company can provide access to the latest cost-saving strategies and technologies. Facilities can benefit from expert knowledge and experience to navigate inflation and other economic challenges effectively.

8. New Facility Construction

Building a self-storage facility is a complicated process that requires careful planning and execution. 

• Choosing the right site is crucial for success. Consider factors like accessibility, visibility, and zoning regulations. 
• Research and compare potential sites to find the right fit for the facility. 
• Find the right financing options and ensure that you can meet the financial obligations of the project. 
• Find the right contractors, and ensure the construction process is completed on time and within budget.
• It’s essential to ensure that the facility meets all building codes and regulations, including access control and security systems.

“Finding the right place to build your self-storage facility isn’t always easy. But it’s one of the most important decisions you can make,” says Robert Priester, of StoragePug.

To overcome these challenges, facility operators should consider working with a professional self-storage management company that can help with site selection, financing, and construction processes.

Cubix specializes in site plan design, permit submission, entitlements, preferred vendor relationships, and construction oversight. Learn more about how Cubix can help you with your new facility construction.

9. Selling and Investing

The self-storage industry is experiencing a period of unprecedented growth, with a forecasted Compound Annual Growth Rate (CAGR) of 5.76% from 2023 to 2028.

Urbanization, population growth, and downsizing are among the factors contributing to the high demand for storage space. Additionally, the COVID-19 pandemic has led to an increased demand for self-storage facilities as people spend more time at home and look for ways to declutter their living spaces. 

According to industry reports, the pandemic has also increased many investors’ interest in the self-storage sector due to its perceived resilience during economic downturns. However, the self-storage industry is also highly competitive, with new players regularly entering the market. 

Here’s what you can do to differentiate: 

• Stay up-to-date with the latest trends and technologies and to effectively manage operations and provide excellent customer service to attract investors. 
• Accurately valuing a self-storage facility is also crucial for selling or investing in the business, and managers need to consider factors such as occupancy rates, rental rates, and location. 
• Research market conditions and adjust their selling or investment strategy accordingly.

10. Third-Party Management

Outsourcing management to a third-party company is a great option for self-storage facility owners who do not have the time, expertise, or resources to manage their facility themselves. 

A professional team handles the day-to-day operations, marketing, and financial management of the facility, while owners focus on other aspects of their business. Third-party management companies are equipped with the latest industry knowledge and technology to optimize revenue, reduce expenses and compliance risks, and provide exceptional customer service. Outsourcing management can lead to increased profitability and a higher return on investment.

However, there are some unique challenges to outsourcing management to a third-party company. 

• Managers need to ensure that the company is trustworthy, has expertise in the self-storage industry, and offers reasonable pricing. 
• Effective communication is crucial between the self-storage facility manager and the third-party management company to ensure that the facility is managed effectively. 

Managers can overcome these challenges by: 

• Researching and comparing third-party management companies
• Asking for references and reviews
• Getting a detailed breakdown of costs
• Establishing clear communication channels and expectations.

Outsourcing management to a third-party company can increase facility value, leading to higher occupancy rates, increased revenue, and better customer satisfaction.

Why Partner With Cubix Asset Management?

Cubix Asset Management is a reputable self-storage management company with extensive experience in the industry, and we’ve helped over 400 storage operators and commercial real estate investors to achieve their business goals. In addition to helping overcome the challenges above, Cubix Asset Management can also assist you with the following.

Revenue Management

At Cubix, we understand that generating revenue is the primary goal of any business. Our unique approach to the market involves optimizing service quality, minimizing expenses, and setting reasonable rental prices. We help you achieve maximum income flow, allowing you to retain existing customers and attract new leads.

Expansion Potential

As your storage facility grows, there will be a need for expansion. We help you determine current storage demands and design facilities that meet your business needs. Our all-in-one self-storage management service covers all aspects of facility expansion, including design and lease-up. 

Dynamic Pricing

We know that setting the right prices is essential for your self-storage business. Our dynamic pricing system allows us to achieve a balanced tenant mix that maximizes ROI and income without causing a loss of customers. We have the expertise to set the right pricing for the unit mix, ensuring you stay competitive in the market.

Financial Management

Financial management is critical to the success of any business. At Cubix, we are experts in financial planning and analysis. We offer services like cash management, full financial statements, payroll, revenue and rate management, budgeting, and forecasting.

Effective Sales, Marketing, and Operation Management

Effective facility operation management is vital to the success of any self-storage business. We have a strong reputation for on-site facility operation management and other competencies such as advanced lead generation, fast online rentals, fully trained staff, full-scale multi-channel marketing, compliance counsel, and human resources training and hiring.

Call Center Services

We provide a robust call center that attends to calls and queries, eliminating the need for third-party call centers. Our call center services include covering after-hour calls in-house without additional employees or expensive phone systems, scaling and supporting a customized call center, accessing a call center with great insights on converting tenants through multi-channel marketing and directing calls to the right person at the right time for skills-based service.

Construction Oversight and Design

Cubix offers a full suite of consulting from site/market analysis to design, entitlement, and construction oversight. We take care of your facility development needs and give you the best structure for your money. We know what it takes to design, build, and operate a self-storage facility, and we’ve been doing impressive work in the industry for years. Learn more about our recent projects here.

 

Cubix is Your Trusted Partner 

At Cubix Asset Management, we treat you like a partner, not just a customer. We understand the challenges you face as a self-storage facility owner, and we have the experience, expertise, and resources to help you overcome them. Partner with Cubix today and enjoy peace of mind knowing your facility is in good hands.