How to Improve the Value of Your Self Storage Investment
Owning a self storage facility is a big investment, but it can also be a rewarding one if you manage it right. Whether you’re looking to sell your self storage property or you plan to retain ownership, it’s always a good idea to explore ways to improve the value of your self storage investment.
Investments are valued by the cash flow that they generate. When it comes to self storage properties, cash flows are realized when revenue is greater than expenses. So, how do you make that happen?
There are several pathways you can take to improve the value of your self storage investment. Here are a few tips that the team at Investment Real Estate has put together based on twenty-two years of experience:
- Consider Having a Commercial Real Estate Valuation
- Adjust Pricing and Fees
- Expand Your Self Storage Property
Consider Having a Commercial Real Estate Valuation
Whether or not you’re looking to sell, having a self storage broker provide a commercial real estate valuation of your self storage property is a great starting point when looking to improve the value of your investment. With the proper broker, you can gain insight into new areas of opportunity for increasing revenue and can receive the support to make it happen. If, for example, you’re looking to increase the rates of current tenants, a team of self storage brokers can help you figure out reasonable tenant rates increases, the proper frequency of those increases, and can introduce you to new technologies to help you manage those rates.
Adjust Pricing and Fees
If your storage facility is well occupied and your rates are below competitors, it may be in your best interest to consider raising your rates. Though it can be daunting to consider raising or adjusting tenant rates, it is one of the most efficient ways to improve the value of your property. In addition to working with a self storage broker to determine how to change current tenant rates, there are some other ways to adjust prices in your favor:
● Implement Tiered Pricing
With a tiered pricing structure, it becomes possible to charge higher prices for storage units at the front or on the first level of your facility. Your property manager can then “upsell” a customer to a storage unit in a better location that costs more, thereby increasing your revenue.
● Add Fees
If you aren’t already charging fees to your tenants, consider starting. Charging tenants with late or administrative fees can add to your income.
Expand Your Self Storage Property
If you have the space and the ability, building and filling additional storage units is a great way to increase the value of your property. Additionally, adding elements like temperature-controlled units can set you apart from your competition and can widen your potential client base. If looking for a less expensive and time-consuming option, the addition of more parking spaces is another great way to improve your property’s value.
If considering an expansion, make sure you have a good understanding of the current market, the potential construction costs, and the timeline for the project. If you don’t have the time or the money to make any significant changes, simply obtaining the approvals for a future expansion can make a big difference.
Still have questions?
Self storage owners have a lot of options when it comes to operation, and especially when it comes to improving value. Requesting a commercial property valuation for your self storage facility is a great step to improve both cash flow and property value, so it’s important to choose the right brokerage firm with the right knowledge and experience to get the job done.
Investment Real Estate has been specializing solely in self storage for twenty two years, and we would be happy to be a part of your self storage property’s success. For more information, contact the team at IRE today!