Benefits Of Using A Property Management Company
By Sascha Zuger
ome new owners and investors in the self-storage industry might be unfamiliar with the practice of bringing in a third-party management company. Likewise, some established owners and operators might feel they have enough knowledge and experience to handle their businesses on their own. Both groups might be surprised at what the right team can do to help a facility reach the next level.
“A skilled property management team can elevate facilities of any size by combining strategic insights, operational excellence, and a dedication to delivering an exceptional customer experience,” says M. Anne Ballard, president of marketing, training, and developmental services of Universal Storage Group (USG). “They go beyond simply handling daily operations—introducing cutting-edge technology, efficient processes, and targeted marketing strategies that attract and retain tenants.”
Bringing a fresh perspective to a business with a focus on branding, curb appeal, and efficiency within the operation can enhance a property’s market presence and profitability.
“You want a team that’s not only competent but exceptional—one that genuinely has your best interests at heart,” says Ballard. “Ultimately, a strong property management team doesn’t just maintain a facility; they actively grow its value, helping it reach its full potential.”
- Management companies take responsibility for the manager and coverage of the property. If the manager calls in sick, the owner doesn’t have to worry about it.
- The management company is abreast on all laws regarding self-storage and can keep the property out of legal troubles.
- The management company knows when to raise rents and when to run specials to promote rentals.
- The management company takes care of the ins and outs of the complicated auction system that can get the owner into trouble if not conducted properly.
- The management company deals with all problem customers that the manager can’t handle.
- The management company can maximize revenue and minimize operating costs.
- The owner can sit on a beach in the Bahamas and collect their distribution checks with no effort!
“A truly great team collaborates closely with ownership to understand and bring their vision to life, ensuring the facility not only meets but often exceeds industry standards,” says Ballard. “They will listen to your goals, offer insightful feedback, and provide expert guidance rather than simply agreeing to every suggestion. You hired them for their expertise, and an exceptional team will leverage that knowledge to take your facility to the next level.”
Property management teams are opening the industry to a new field of investors who might be interested but felt their lack of experience would leave them at a disadvantage.
“I’m opening up a new facility next month under that exact premise,” says Diane Gibson, owner and president of Cox Armored Mini Storage Management, managing 20 facilities in Arizona for the past three decades. “They decided they didn’t know enough about the mini storage world to do this effectively, and at that point in their life, didn’t want to learn it. Even though it does cost to have a management company, that cost far outweighs the net income you can earn by having it professionally managed.”
It’s important to get on the same page with your management team about the logistics and schedule of connecting to make all sides comfortable.
“It really depends on each individual owner,” says Gibson. “Some want to talk once a week; others prefer a weekly email. Some want to be hands-off, so I just email the budget every year. I give them the option as to how much of my time they want.”
When times are tougher, less rosy financial statements can include a letter outlining details of what is being done and marketing plans to shift the trajectory.
“We include details of how we are managing the income, the occupancy, etc.” says Gibson. “I’d rather be proactive than reactive. Most of my owners are out of state, so they’ve hired a local management company. We answer any questions right away so we earn their trust.”
Another important element where a management team can shine is through their local knowledge and understanding of the most effective plan for marketing.
“We go to the community events—trunk-or-treats at Halloween, farmers markets in the summer,” says Gibson. “We get the managers involved and they become our eyes and ears for the communities. They get involved in the chamber; in one facility, the mayor knows our manager. That’s how involved she is. We strive for that. A lot of other facilities don’t have their on-site staff do that, so that’s how we can compete.”
This background knowledge informs rate adjustments to maximize income, in addition to reducing expenses by buying at scale to lower costs across multiple managed facilities. This type of insider know-how isn’t easy to achieve and is even harder to fake.
“The biggest challenge is knowing what you have and how to deal with it,” says Gibson. “That just comes from experience. Someone just starting out in the business is going to have a really difficult time trying to figure that out themselves. You could have a management company step in and make twice the amount of money in your first year. Effectively, we’re paying for ourselves.”
“Whether you’re in the development stage or already operational, it’s crucial to vet potential partners thoroughly,” says Sarah Beth Johnson, vice president of sales and development of Universal Storage Group. “Consider their operational policies, financial transparency, and branding philosophy to ensure your investment is in the right hands.”
Johnson shares which three areas most significantly impact the success and profitability of a facility, with red flags and tips on how to assess a prospective management company.
Understand their market policy and competitive management practices.
What To Ask: Do they manage competing facilities in the same area? If so, how do they handle potential conflicts of interest? What safeguards do they have in place to ensure your success isn’t compromised?
Example Policy: “USG provides a protected five-mile radius for our owners. We will not manage another facility within that radius unless all parties agree, ensuring a fair and conflict-free operational environment. This arrangement can even be beneficial when one facility offers all climate-controlled units and another offers drive-up options, fostering collaboration rather than competition.”
Red Flags: Be wary of management companies that also own properties in your area, as this can lead to potential conflicts of interest.
Insist on a clear and comprehensive proforma/budget.
What To Look For: A proforma that includes detailed line items without vague terms like “miscellaneous” or “other.” A clear explanation in the contract for how and when funds outside the budget can be spent. Inclusion of all management fees and service costs in the proforma, alongside lease-up rates and expected monthly income.
Best Practices: The budget should be adhered to meticulously once signed, and any deviations must be clearly justified and agreed upon in advance. At USG, every dollar is accounted for, providing owners with peace of mind and financial clarity.
Red Flags: Management companies that provide generic or overly simplified budgets without detailed line items may lack the transparency and accountability needed to manage your investment effectively.
Clarify branding expectations.
What To Ask: Will I need to rebrand my facility if I sign with your management company? Are rebranding costs included in the agreement, or are they hidden within other fees?
Red Flags: Management companies that require rebranding without demonstrating its value or that attempt to hide related costs can create unnecessary financial strain and disrupt customer loyalty.