Book A Consultation

Copyright Steel Storage 2015
Design by R6 WEB

The Health of Your Self-Storage Facility Relies on Economic Occupancy

Home / Uncategorized / The Health of Your Self-Storage Facility Relies on Economic Occupancy

The Health of Your Self-Storage Facility Relies on Economic Occupancy

Let’s discuss how to maximize a self-storage property. Some storage owners and managers are focused only on the store’s occupancy, but this is only one factor in understanding the health of the property. Unit occupancy rates may mislead you into thinking the store is doing well.
Over the years I have taken on the task of fixing self-storage properties that are in distress. Several of the stores have had unit occupancy above 85 percent, and yet, even at that high level they were not making enough money to pay the bank mortgage. In one case, the property had a physical occupancy of 86 percent but was bringing in money as if it were 38 percent economically occupied. In each case, the problem wasn’t in the unit occupancy, but in the following areas:
Employees were giving substantial rent discounts for an unlimited time period.
The store’s delinquencies were too high.
Employee theft.
Even though you may experience a decline in occupancy, you can still maintain consistent revenue by increasing customer ‘standard rates’. It is common to see underperforming storage properties (typically from poor management), properties in subpar locations, and properties in lower socioeconomic areas having to give more concessions to get new customers. Giving too many concessions and/or keeping the rates too low will dramatically affect the profitability of the store.