Frequently Asked Questions
This depends on the location, the market and the ability for new competitors to enter the market. This also depends on how much you pay for a facility or how much it will cost you to develop a facility. Because the self-storage industry has grown significantly over the past decade, there are greater risks and much more competition.
What should my expense-to-revenue ratio be?
We do not assign a target expense-to-revenue ratio to our stores; rather, we look at the overall business performance.
How much should I pay my managers?
Your managers are the most important assets you have. Historically, our industry has paid managers less than other similar industries, but recently, many operators have seen the value of compensating mangers properly. If you want top professional mangers, plan to pay them accordingly.
Is it true that I should own a self-storage facility because there is not much work to making them run profitably and they do not cost much to build?
Nothing could be further from the truth. While it is true that most facilities operate with less than 4 employees, there are many other factors to running a facility. Development, constructions and land costs have escalated over the past decade. Be prepared to pay top dollar for your new facility.
Are delinquent accounts a big problem for your facilities?
Unfortunately, in our industry, we do have customer who for one reason or another do not pay their rent on time and become delinquent. Some of these delinquent accounts lead to auctions. Delinquent accounts can be minimized by persistent, firm (not rude) follow-up by your management team. At Executive, we follow all applicable state and local laws with respect to collections and we train our management teams on how to collect them. We attempt to maintain less then a 4% delinquent rent rate for our stores.
Should I include the managers in my budgeting development?
Yes. Mangers can be very helpful in projecting rent fluctuations, delinquencies and other revenue concerns. Mangers should be aware of controllable expenses (supplies, maintenance, services, etc.) and can be helpful with ideas for how to save money without sacrificing service.