Managing operating expenses is crucial in the self-storage industry, where costs such as credit card fees and abandoned unit cleanup can quickly accumulate, directly impacting your Net Operating Income (NOI). Experienced operators deploy various strategies to increase revenue and mitigate some of these unavoidable costs.
Automate Customer Service to Save Money & Maximize Employee Time
One of the highest costs for any business is payroll. In the self-storage industry, balancing automation with essential human interaction is key to providing excellent customer service. Implementing automation tools can significantly reduce payroll expenses by streamlining operations that do not require constant staff attention. In turn, staff are freed up to help customers when human interaction is necessary.
Management Software Should:
Allow for a completely automated rental process that allows potential tenants to:
- Select and rent units online.
- Provide contact information during the rental process.
- Receive automated welcome emails or texts.
- Instantly program and deactivate gate codes.
- Update contact and payment information.
- Store digital copies of leases.
- Receive automated communications for critical information, past due notices, late fees, and auction notifications.
Such software reduces the need for full-time staffing to part-time, considerably lowering monthly operational costs.
The Role of Property Management Companies
Strategic Fee Implementation to Boost NOI
Strategic Fees Include:
- Administrative Fees vs. Deposits: Charge a one-time administrative fee instead of a deposit. For example, a $25 fee could include a lock, reducing administrative tasks and generating more income than typically retained from deposits.
- Lock Sales: Keep locks for sale, purchasing them in bulk and offering them at a lower price than retail, adding a simple yet effective revenue stream.
- Check Processing Fee: Encourage autopay by charging an additional fee for traditional payment methods. This reduces the time staff spend processing payments and offsets merchant fees.
Communication and Compliance
Effective communication is crucial when implementing new fees. All fees should be transparently stated in the rental agreement, and existing customers should receive updated agreements electronically through management software. Additionally, understanding your state’s storage and lien laws and consulting with experienced property managers is essential to ensure that all fees are legally compliant and appropriate.
By employing a mix of automation, strategic fees, and effective communication, you can significantly increase your self-storage facility’s net operating income and overall value. These strategies not only optimize operations but also ensure that your facility remains a competitive and profitable entity in the self-storage industry.
