Why Isn’t My Self-Storage Property Worth More?
Owning and managing a self-storage property is a big investment, and you always want to be sure you’re getting the most out of it. Finding out your self-storage facility is not worth as much as you thought can be shocking and frustrating.
However, there are always ways to improve the valuation of your self-storage property. You can make small or large changes that increase the value of your property and maximize your return on investment (ROI).
Reasons Your Storage Unit Property Valuation Is Low
There are many factors that go into storage unit property valuation, and underperforming on any of them could be the reason your self-storage facility is not worth more.
One of the most common areas where properties lose value is in suboptimal operational processes. These operational shortcomings often include factors such as:
- Failure to adjust rates along with competitors and increases in the cost of doing business
- Leniency with delinquent accounts and inconsistencies in payment collection
- Inefficient marketing practices that don’t drive leads
- Low occupancy and too many vacant units
Properties can also lose value when on-site upkeep falls to the wayside or maintenance costs aren’t evaluated regularly.
How to Increase the Value of Your Property
After a disappointing assessment, you should take a step back and consider why your storage unit property valuation is low. From there, you can make changes that will optimize your operations and increase the value of your property.
Make Repairs and On-Site Changes
Something as small as a fresh coat of paint on your storage units can project a greater sense of quality to customers and buyers. It also reflects your care and pride for your facility.
If you have the capital to make larger changes, optimizing your unit mix or expanding into unused space can significantly increase your property’s value. You want the right units to meet demand, whether that means installing smaller units or creating larger options.
Evaluate Rates and Collections
Analyze your pricing model regularly to ensure it maximizes your potential income. Consider raising the rate for tenants after the first six months and again on an annual basis.
While leniency with overdue payments may seem kind, it can lead to major losses and inconsistencies for you. Try to keep your delinquency rate low to optimize your income and property’s value.
Take Advantage of Value-Adding Opportunities
Renting storage units is your main business, but there are many other income opportunities you can take advantage of to increase your property value.
Consider adding specialty units with temperature or humidity controls that give you an edge, or install billboards or cell towers on your property for extra money outside of rental fees.
Contact IRE for a Property Valuation
At Investment Real Estate, LLC, our team of brokers is dedicated to providing accurate valuations and helping you understand why your storage unit property valuation may be low.
We also offer recommendations to help you realize your goals and maximize the value of your property for the optimal ROI or maximum payout when you sell.
Give us a call at 717-779-0804 or reach out online to get started.