The current trend of storage auctions is growing in popularity by the day. TV shows are devoted to following professional auction buyers, and people everywhere are on the lookout to find a good deal for themselves. But as the facility owners, there is more to the auctions than the public may realize. Just because storage units may sell for more money than their back-rent racked up, it doesn’t necessarily mean it’s extra profit.

There are many rules involved with running these storage unit auctions, and many vary from state to state. For example, in the state of California, the profits – after rent bills are settled – are to be turned over to the original unit’s renter. If, after a year they cannot be contacted, the money should be given to the county in which they are located. But, according to an article found from Inside Self Storage, “the county has no mechanism in place for handling these types of funds.” So, you must go through the formality of sending them a check, but will later need to send the profits to the state. One tip for making the process easier, given by Jeff Greenberger, attorney, is to stamp the checks with a “void after 90 days label,” allowing the unit’s owner to wait the three months and mail the funds to the state. The money is then held until the owner can claim it.

Each state has a separate set of rules and procedures, which can be found at MissingMoney.com. The website can also be used to search for owed funds to individuals, often including stocks, bank accounts, and contents in safe deposit boxes. But the bottom line is, no matter the amount of “extra” profit, a storage facility will have to spend time and money finding their former tenants – all for funds they cannot keep. For many storage facility owners, depending on the amount of back-rent, it may simply not be worth the hassle.

Have questions or comments? Let us know. And be sure to check back in for more business tips and service reviews.

Photo courtesy of Flickr.

Here at Self Storage Investing, we are dedicated to helping other storage facility owners – whether new to the business or those who have yet to commit – the best advice when breaking into the industry. In order to carry on that promise, I decided to start a series of blogs in which I review and compare different business necessities. Stay tuned for more great self storage business advice. Up first: renters insurance.

Renters insurance, although not (generally) provided by the building owner, is an important piece of the self storage business. Individual renters will be interested in knowing perks, prices, and stipulations to different policies. As a self storage facility owner, it is a good idea to have this information on hand, and be able to offer advice to your future renters.

Here is a breakdown of some of some of the top renters insurance companies:

Safestor

This company is unique in that it offers policies strictly for self storage units, which means they specialize in policies and coverage.

What Does it Cover?

According to their website, Safestor covers: property loss due to fire, hurricane, tornado, wind, earthquake, smoke, lightning, hail, vandalism, building collapse, leaking water, burglary, and explosion

What Does it Cost?

The company offers three options for renters:

-With coverage of $4,000, it costs $6 per month

-Coverage of $10,000 costs $18 a month

-And for $15,000 worth of insured, $24 each month

(For what it’s worth, their website was by far the most informative and easy to navigate.)

Bader Company

Bader works a little differently as it purchased by the building’s owner, not the renter. While they do offer commercial insurance, the company also allows for property owners to offer the option of tenant insurance. Renters may find this more convenient than working with two separate companies.

Coverage and quotes available upon request.

Esurance

Pretty standard set-up here. Unit renters can set up a policy for renters insurance. They also offer separate policies for storage units vs. an apartment or home rental. Esurance also lists the price at an average of $.50 per day for renters insurance.

Shelter Insurance

For you folks in the midwest, Shelter Insurance offers coverage of storage units by a yearly fee. Because they do not specialize in self storage units, they are able to offer more competitive prices.

What Does it Cover?

Fire, theft, wind, hail, water, tornado, vandalism, building collapse, explosion, and, upon endorsement, earthquake

What Does it Cost?

On average, $10 per year per thousand insured

Other popular companies, such as Geico, State Farm, Allstate, Liberty Mutual, etc., offer renters solid protection plans as well. Potential renters can easily get a free quote by visiting their websites. However, it’s also important to note that many homeowner insurance policies cover a percentage of outside-stored items. Depending on the value of a unit’s contents, those with homeowners policies may already be covered. Renters should check with their local agent for policy-specific details.

Have tips or questions? Let us know. And be sure to check back in for more tips in the self storage facility ownership field.

Over the years I’ve seen and heard hundreds of excuses for people not starting their own self storage business. “There’s already too many facilities in our area.” “I wouldn’t know where to start.” Or, “My neighbor rents from such-and-such.” And while the excuses themselves may vary, they all have the same theme: overestimating the competition. Many of these startup businesses fall short before they can even launch due to lack of confidence. But, there are several reasons you should have faith in your abilities.

Why Certain Fears are Invalid

When I hear “There’s already too many facilities in our area,” I always ask for more info. How many facilities? Are there climate-controlled units? Individually alarmed? Business Centers…? More often than not, these questions can’t be answered. Just because there are “a lot” of self storage facilities doesn’t mean every market is covered. Many owners overestimate what their customers will want, offering services that are more than consumers are willing to spend. Others may have underestimated storage needs. The key is to find a gap in the market and take advantage of it.

These other excuses can simply be solved by gaining confidence in what you’re doing. Do bigger-named companies have “control” of the market? Start advertising as a self-owned shop. Offer competitive prices, or simply connect with your customers. Never assume the current businesses have it under control. The self storage market is a versatile one. The business is continuing to expand, and those who are staying ahead of the curve are the ones seeing this growth – not necessarily the ones who own the most facilities. Find a gap in the industry and take charge, regardless of what the other guys are doing.

Out of all of the successful tips I’ve found, none have been as helpful as simply understanding what the customer wants. Tap into your inner consumer, and you’ll find it can be easy to compete with even the largest of self storage facility companies.

In the past month we’ve discussed a few different tips to help newcomers break into the self storage business. Today, we’ll talk about one more important tool to put in your belt that will help any new property ownership business flourish: networking. While no one will argue that networking is an important aspect for any self storage business, many may not see the full potential that can be found in solid networking skills. Knowing the right people and knowing how to get in touch with knowledgable people can often help make or break your self storage company.

Networking and Your Manager

When it comes to networking in the self storage industry, this is one skill that you should look for in a manager or be willing to teach them. Having the proper networking skills can provide multiple opportunities for your business, and, in the long run, the time and energy spent on networking will more than make up for itself. Whether you find a manager who is a networking pro, or choose to invest in their training, it’s a good idea to make sure their skills are as current as possible. Subscribe managers to newsletters, send them to managing events, or just ask that they keep in contact with others in the self storage business. Then, when an important event is coming up, they will not only have current contacts, they will have the necessary skills to make new ones.

And as the owner, it’s always a good idea for you to keep up on your networking skills as well. There is plenty to be learned from others in the business, and the sooner you take the time to get to know more experienced self storage facility owners, the more you’ll be able to gain from those relationships. Reach out to others, and attend business related events – one of the best ways to meet up with other self storage investors.

Remember that solid networking skills will only help you in the long run and keep you connected with others in the business. Be sure to check back in for our next post on breaking into the self storage industry.

Here in the self storage business there are many important aspects to keeping your business in line. However, perhaps none are more important that who you choose to manage your facility/ies. A good manager can turn a self storage facility into a booming, profitable business, and in the same light, an awful one can bring it tumbling to the ground. Finding the right manager may be a time consuming task, but a necessary one when you consider all of their responsibilities.

Choosing your manager

When it comes to finding a self storage facility manager, do your homework. Do your potential hires have experience? Is that experience topic related? Or will their other skills translate? Just because a potential manager has minimal experience with the self storage industry doesn’t make them a bad choice. Look at their backgrounds: have they worked in retail? Dealt with customer service? All of these things will fall under your manager’s jurisdictions. Look beyond their former positions and see what skills will help them succeed in the self storage industry.

Another aspect to consider when hiring your manager is to get help from an outside source. Having a personal relationship with a potential hire or choosing after first impressions aren’t always a good idea. Ask a fellow property owner to help you decide, or a close friend who has experience owning their own business or working in management. When it comes to picking your manager, you can’t afford to get emotionally involved and risk choosing the wrong hire.

Ongoing education

Next, once you’ve made your pick, don’t forget that the self storage business is always changing, and so are the management techniques. There are hundreds of opportunities for continued education, and allowing your manager to expand their knowledge will only make them better at their job. Treat your manager to seminars, webinars, speakers, or a training sessions on a regular basis. Not only will the expense help your employees, but it will have a direct (and positive) effect on your business; helping it run smoother. And although it may seem like a costly expense, remember that with employees, you get what you pay for and your manager is the central piece holding your business together.

In the past few decades, it’s safe to say that the self storage industry has taken a sharp turn in the upward direction. People are accumulating more and more over the years, and have less space to store them. We’ve also witnessed a steep increase in people moving over the past several years, while the desire to relocate everything you own is not quite as popular. Where there’s a need, there’s room for a popular business, and with the increase of all of the above, self storage companies have been popping up ever since.

Of course there are still many who have a large enough basement to hold all of their belongings, or people who are less sentimental and hold an annual garage sale to rid themselves of any extra items. But that hasn’t slowed the market for self storage investing down in the least. As a self storage facility owner, it is important to know where this business is coming from. And the next time you’re marketing or looking for new customers, keep these demographics in mind.

Top Self Storage Users

1. Military Families

With the constant moving and unpredictability military families (or singles) often face, many choose to keep certain belongings in a self storage unit. While they may be stationed overseas, across country, or even across town, they have the flexibility to move freely while still keeping their things safe. This option is often more fiscally responsible for those who frequently move.

2. College Students

Younger generations may move from home and find they simply don’t have the space they did in their former homes. Perhaps they’re parents have moved, or whatever they need to store needs to be closer than their previous residence. Self storage is also a good option for students or those just starting out on their own as it is much cheaper than purchasing or renting a larger property.

3. Those who have downsized

Many people who have decided to sell their larger homes are left with an overwhelming amount of belongings they no longer have the space to store. Using self storage units are a great option for them to hold onto their keepsakes, while not having to commit to a larger property than they need. And, if these people are still in limbo, it offers them a safe place to keep their things until they can get settled into a new and more permanent home.

4. Just need the extra space

Finally, self storage businesses everywhere are help kept full by those who simply don’t have the room to hold everything. Whether they are storing a family member’s belongings, waiting to sell their goods on eBay, or just have a hard time getting rid of things, these renters have the flexibility to rent space as it is needed. Building a garage or shed is expensive, but renting a storage unit allows someone else to pay all of the property bills. It also provides the option of using as much or as little space as you need. 

In the self storage business, there’s not always a lot of opportunities to have one-on-one contact with your customers. And chances are, if you do, it’s to talk about maintenance or contracts. So how do you get reviews or testimonials that will help your business from existing customers?

Why should you have reviews?

Customer reviews are an excellent way to give first-hand experience on your company. Potential renters will appreciate opinions from those who have already dealt with your business and will be more likely to trust you after hearing others’ reviews. Having existing customers review your business will also show that they are not only satisfied with the services, but confident enough in their experiences to share them with others.

Using testimonials are also a form of marketing with minimal costs as sites such as yelp, yahoo local, etc. do not charge for users to post or check reviews.

How to obtain self storage reviews

If you don’t already have customer reviews for your self storage business (a quick google search can find this out for you), a good tactic is to be direct with your customers. Ask them to post for you … their honest opinions though, as the reviews should be genuine. Let them know you are trying to expand your market and a review from existing customers will let others know what to expect. You may offer those who agree a coupon of sorts, or a discount on services in exchange for their review. Just make sure whatever you offer them does not come off as bribery or payment. However, a simple this-is-for-your-trouble coupon can be a sincere form of thanks.

Another great way to get exposure is to offer deals to new customers. The sale will get the buzz out about your company, and renters have a reason to contact you because of the new-timers discount. And, those who are satisfied are sure to pass along the news, either through word of mouth or through their own personally-written testimonial.

Keep these tips in mind the next time you’re marketing your self storage business to help bring in new customers and keep your current ones involved and happy.

Marcus & Millichap Real Estate Investment Services has tapped Michael Hoffman as national director of the firm’s national self-storage group. Hoffman is also first vice president & regional manager of the firm’s Denver office.  He has also served as regional manager of the Austin, San Antonio and Houston offices.

He began his career with Marcus & Millichap’s Newport Beach office in 1992 as an associate focusing on the multi-family market, receiving several distinctions for sales achievements. In 2001 he was named sales manager in the Ontario office, where he managed and trained the sales force. In April 2004 he was promoted to vice president and then first vice president in April 2008.

According to president & CEO John Kerin, Hoffman’s extensive knowledge of the national self-storage market makes him a valuable asset to clients as well as self-storage investment specialists.

Hoffman received his undergraduate degree in real estate finance from the University of Arkansas.

Information from:  CPExcecutives.com

Hey folks,  Scott here wondering what you think the outlook is for Self Storage — Are you keeping up on the latest news in the industry?  Do you have pending questions?

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