6 Factors to Consider to Attract More Tenants to Your Self-Storage Facility
Explore the top attributes tenants take into consideration when looking for a self-storage unit.
Image by Kadarius Seegars from Unsplash
Self-storage facilities have become an increasingly popular asset among commercial real estate investors. In fact, the industry is one of the few that remained relatively unscathed throughout the widespread economic repercussions of the COVID-19 pandemic. The truth is, consistent demand for storage space has led many investors to add such facilities to their portfolios — but that doesn’t mean that simply owning a facility is enough for it to be a safe investment.
How Can Self-Storage Investors Secure a Better ROI?
Self-storage facilities — while relatively hard to fail — also exist in a growing market with plenty of competition. In order to keep ahead of the pack, investors must try to ensure the success of a facility by catering to the needs of the clientele. It's easy to add some new features and assume that this will be enough to bring in more customers, but to really secure a better ROI, investors should take some time to analyze what potential tenants in their market are really looking for.
Below are some of the primary considerations self-storage tenants have when choosing a facility to rent.
1. Unit Size
The size of the unit is a major consideration. You will find that many of the more successful self-storage facilities have units of multiple different sizes. This ensures that regardless of how much space a tenant needs, there is a good chance the facility has a storage unit to match. Most self-storage tenants do not go with a one-size-fits-all approach — but actually consider the items they are storing and how much space they are likely to occupy. Offering a variety of differently sized units at varying price points gives more flexibility to tenants and further increases the likelihood of them finding the right unit at your facility.
2. Location
Location is another key factor that you have to think about when you are choosing a storage facility. Where is it in relation to residential neighborhoods or businesses? Ideally, you are going to want a storage facility that will not be too far from your target tenant base. After all, most tenants want to make sure that it is easy to access their goods when they need them without having to make a whole day out of it.
3. Ease of Access
Investors also have to consider accessibility when choosing a storage facility. Equally as important as the location itself are the facility’s entry access points. This is particularly important for drive-up and vehicle storage, since a property that is hard to reach or is located on a very busy road may not appeal to some tenants who like to get in and out with little hassle.
Many tenants pay close attention to how easy it would be to get their stuff into and out of the facility. This extends to facilities with indoor units that have maze-like hallways. Does your facility have trolleys that tenants can use? Will the process be easy enough for them to handle on their own?
4. Safety and Security
One of the most important concerns that self-storage tenants have is related to safety and security. Tenants want their belongings to be kept as safe as possible, and not just from theft, but from fire hazards, humidity, and mold as well. Investors should take great care in making sure a facility is capable of protecting the belongings of its tenants.
That said, the safety of its tenants must also be addressed. Consider a tenant at a 24-hour storage facility. They want to feel comfortable accessing units day or night, so ensuring safety and security is paramount. Even for facilities only open during business hours, tenants tend to look for security guards, adequate perimeter security, alarm systems, and cameras. In many cases, gated access is a bare minimum requirement.
5. Hours
Accessible hours are also an important factor considered by potential tenants. Most people do not have the time to do anything during normal business hours — after all, that is more than likely the time they would be working. Storage facilities which are open 24 hours a day can cater to even the most difficult of tenant schedules, by offering access to the facility all day and night long — seven days a week. Even if your facility isn’t open at all hours, keeping the property accessible until 9 p.m. or 10 p.m. on most days can be attractive to many would-be tenants.
6. Price
Probably the most obvious consideration for tenants is the price of renting a unit. You should always analyze prices presented at other facilities on the market. You may notice that they can vary substantially based on some of the factors discussed above. Compare and contrast the features and prices of several facilities in your area before setting your prices — being competitive is important, but undercharging could significantly hurt profits.
Related Questions
What are the most important factors to consider when setting up a self-storage facility?
When setting up a self-storage facility, the most important factors to consider are the surrounding market conditions, the level of competition within the market radius, and the saturation level of the market.
It's important to look at the population and job growth, the number of homeowners or renters in the area, and the location's proximity to university campuses, residential areas, or businesses. It's best to look at these metrics within a 3- to 5-mile radius of the facility.
It's also important to consider the level of competition within the chosen market radius. If there are already a lot of self-storage facilities nearby, it may be harder to attract new tenants. It’s also important to consider whether there are any facilities under construction or in the planning stages, as those can affect your property in the future.
The saturation level of an area is measured by the gross square feet of storage space available per person. Currently, the average self-storage inventory per capita across the country is around 7 to 8 net square feet. A market with a per-capita inventory above the U.S. average is usually considered oversupplied, whereas anything below is undersupplied.
What are the best ways to market a self-storage facility?
The best ways to market a self-storage facility are to create a website, use social media, and create a referral program. Additionally, you can use traditional marketing methods such as print ads, radio ads, and direct mail. It's also important to create a strong online presence by optimizing your website for search engines and creating content that is relevant to your target audience. Finally, you can use local events and partnerships to increase visibility and attract new customers.
For more information, check out this article from SelfStorage.com on marketing your self-storage facility.
What are the most effective strategies for pricing a self-storage facility?
When pricing a self-storage facility, it's important to consider the local market conditions and competition. It's best to look at the population and job growth, the number of homeowners and renters in the area, and the proximity to university campuses, residential areas, and businesses within a 3- to 5-mile radius of the facility. Additionally, it's important to consider the saturation level of the market, which is measured by the gross square feet of storage space available per person. The average self-storage inventory per capita across the country is around 7 to 8 net square feet. A market with a per-capita inventory above the U.S. average is usually considered oversupplied, whereas anything below is undersupplied.
It's also important to consider the level of competition within the chosen market radius. If there are already a lot of self-storage facilities nearby, it may be harder to attract new tenants than if there were very few options available. It’s also important to consider whether there are any facilities under construction or in the planning stages, as those can affect your property in the future.
Once you have a good understanding of the local market conditions, you can use that information to set competitive prices for your facility. You can also use online tools such as StorageTreasures to compare prices and get an idea of what other facilities in the area are charging.
What are the best ways to ensure customer satisfaction at a self-storage facility?
Customer satisfaction is key to the success of any self-storage facility. Here are some of the best ways to ensure customer satisfaction:
- Provide a clean and secure facility: Customers want to know that their belongings are safe and secure. Make sure the facility is well-maintained and that security measures are in place.
- Offer competitive rates: Customers want to know that they are getting a good deal. Make sure to research the competition and offer competitive rates.
- Provide excellent customer service: Customers want to feel valued and appreciated. Make sure to provide friendly and helpful customer service.
- Offer flexible payment options: Customers want to be able to pay in a way that is convenient for them. Offer flexible payment options such as online payments, automatic payments, and payment plans.
- Provide additional services: Customers want to know that they are getting more than just storage. Offer additional services such as packing supplies, moving services, and storage insurance.
By following these tips, you can ensure that your customers are satisfied with their experience at your self-storage facility. For more information, check out this article from Multi-Housing News.
What are the most important safety and security measures to consider for a self-storage facility?
When investing in a self-storage facility, it's important to consider the safety and security measures that are in place. This includes things like 24-hour surveillance, gated access, and alarm systems. It's also important to make sure that the facility is well-lit and that there are adequate locks on the units. Additionally, it's a good idea to have a manager on-site at all times to ensure that the facility is secure and that any issues are addressed quickly. Finally, it's important to make sure that the facility is properly insured in case of any accidents or theft.
For more information, you can check out this article from SelfStorages.com.
What are the most important legal considerations for a self-storage facility?
When investing in a self-storage facility, it's important to consider the legal implications of the investment. Here are some of the most important legal considerations to keep in mind:
- Zoning laws: Make sure the property is zoned for self-storage use. This may require obtaining a special use permit from the local government.
- Lease agreements: Make sure the lease agreements are in compliance with local laws and regulations. This includes ensuring that the tenant has the right to use the facility for the intended purpose.
- Insurance: Make sure the facility is properly insured for any potential liabilities.
- Taxes: Make sure the facility is in compliance with all applicable taxes and fees.
It's also important to consult with a lawyer who is familiar with the laws and regulations in your area. They can help you navigate the legal aspects of investing in a self-storage facility and ensure that you are in compliance with all applicable laws. For more information, check out this article from Multi-Housing News.