Self-Storage Operators’ Common Pain Points Addressed
As someone who’s considering investing in commercial real estate, it’s likely you’ve come across a few possible options—do it yourself or work with a sponsor (like Belrose).
When pursuing an investment opportunity on your own, every single aspect of the process is in your hands. By comparison, a real estate syndicator does the behind-the-scenes work for you to identify new opportunities, negotiate the best price, and conduct due diligence.
To help you decide what’s the best avenue for you, here are a few common challenges of becoming a self-storage operator.
Property Maintenance
If you choose to become a property owner, the upkeep, maintenance, repairs, and renovations fall entirely on you. The good news is, self-storage facilities are constructed fairly simply as compared to other types of commercial real estate properties, like apartment buildings. This makes it easier, and typically less expensive, to maintain the property. However, as a property owner, it’s important to keep a vigilant eye on potential issues. You and your management staff would benefit from regular inspections of the property, as well as creating a routine maintenance schedule for things like the HVAC, pavement, pest control, etc.
Ever hear the phrase, “an ounce of prevention is worth a pound of cure”?
It’s always better (and more cost-effective) to prevent maintenance issues from happening, rather than waiting until they turn into larger problems. As an individual investor and operator, however, it can be time-consuming and difficult to oversee your property’s maintenance, especially if you’re unsure of what to look out for or live far away from the facility.
Marketing
Attracting people to your facility is a large undertaking, especially going it alone. You need to find ways in-person and online to bring renters to your facility.
Our team at Belrose, for example, focuses on building an online presence for every facility we purchase. We follow search engine optimization (SEO) best practices to help our investment rank high on Google when people search locally for self-storage facilities.
There are many ways to market your facility both online and in person, from renting billboard space and putting ads in the local newspaper, to creating a website and purchasing Facebook ads.
Benefiting from proven marketing strategies is just one of the many advantages of working with a sponsor, especially if you don’t have experience in marketing commercial properties.
Technology
The use of AI and advanced technology is growing in all industries and helping self-storage facilities meet new consumer expectations and demands. If operators are slow to adapt these offerings, they’re likely to lose out to those who will.
Not only are tech tools great for attracting new customers, but they can help lessen overhead costs as well. Of course, the less capital you spend on operating expenses, the greater your return on investment will likely be.
As a facility owner, you can offer your tenants automated features like:
Paying rent on their phones
Opening facility gate through a mobile app
Electronically signing documents
Virtually touring facilities and units
On the backend, you can benefit from automatic inventory tracking, chatbots to offer support to customers, and lead-generating tools for marketing. Integrating tech to meet consumer desires and improve operational efficiencies will be integral in improving a facility’s bottom line.
At Belrose, we use technology to drive occupancy rates and offer renters an easy, streamlined sign-on experience. For example, we put QR codes on the fences surrounding our facilities. Any driving by can scan the code and sign up for a unit, enter their credit card information, and get the gate code all from their phone in a matter of minutes.
Legal
When operating a self-storage facility on your own, you’ll need to familiarize yourself with the legal obligations and risks associated with ownership. Each state and municipality has its own set of rules and regulations, which presents an added challenge for anyone operating multiple facilities.
You’ll need to build a team of legal professionals who can offer guidance on issues such as lease language, late-fee timing and amounts, delinquent notification letters, auction processes, and more.
As a sponsor, we work directly with a knowledgeable legal team to ensure our facilities follow local and state laws.
Property Protection
Your facility is your investment, and you need to take steps to protect it effectively. In fact, the ability to purchase insurance policies for your investment is a notable advantage of investing in a hard asset, like self-storage. As an operator, you’ll need to obtain adequate insurance coverage to protect your property against things like vandalism, broken pipes, tornadoes, floods, and other natural disasters. In addition, we highly recommend requiring your renters to obtain renters insurance to cover their belongings.
At Belrose, each of our facilities is covered by a robust property and casualty insurance policy. We’ve seen first-hand the damage a tornado or a fallen tree can cause to our properties, and having the right coverage in place is critical to protecting our investment.
Invest With a Sponsor You Trust
The benefit of working with a syndicator like Belrose is that you as an individual investor can own a portion of a commercial real estate investment without having to fund or oversee the entire project on your own. If you’d like to learn more about how we help investors build wealth through self-storage investing, reach out to our team.
