Who manages your self storage property? Any insight on 3rd party management?
If you were to own or build a 35k+ SF self storage facility, would you let a third party management it? Such as a public storage etc. 

Anyone have any insight when it makes sense to hand off management versus doing it in house especially if you’re new to the asset class? Is 4.5% on gross income a reasonable fee?
[{"id": "hade7fi", "text": "I have built out, and manage 28k sq.ft. solo. Right now I'm putting in more face time because I just completed a 40% expansion and am focused on taking advantage of a dramatic increase in rent up, but once it's stabilized, I can run the entire facility on about 4-8 hours a week, and a big chunk of that can be done remote. \n\nYMMV", "replies": [{"id": "hadjuw1", "text": "Hey, have questions about the expansion - mind if I reach out?", "replies": [{"id": "hadrff4", "text": "Sure, go ahead!", "replies": [{"id": "ixxxckf", "text": "I apologize to comment on this really old post but how do you find good storage properties at a low cost and how did you get the funding to start this business?", "replies": [{"id": "ixyhw7v", "text": "In the beginning, I bought the land for cheap, from the city, in a distressed industrial area.  \n\n\nStarted with two partners and we all put cash in. Cleared just enough for one small building, did everything as cheap as possible. It didn't make money, but it didn't lose money either. \n\n\nTook a modest loan for a second building and the entire thing stalled for a long time as one of the partners was VERY debt adverse and refused to take on any debt to fund growth. I ended up getting into a well paying job, lived on ramen for three years, and saved a boatload of cash.  \n\n\nFunded an additional building, bought the recalcitrant partner out, and have been using business equity and revenue to maintain a moderate debt/income ratio and have been expanding, and going gangbusters since.\n\nNow, as far as finding good properties, at low cost, that's probably not going to happen (my pessimistic opinion). Self storage has been one of the hottest CRE segments for a while, you read about it all the time in the various investment forums, and they're always saying to find some Mom and Pop, neglected, operation off market, and do some sort of value add, owner financed deal. \n\nI'm not saying that those deals never ever happen, but I am of the mind that that sort of unicorn deal isn't likely to happen at all. I feel that the knowledge of this segment is pretty widespread, and everybody's going to be looking for inflated \"market rates\".", "replies": [{"id": "iy0n1jz", "text": "Ok thank you very much I\u2019ll keep a look at but it sounds like the barrier for extra is high even if I get a few business credit cards I\u2019d still struggle to find an affordable property", "replies": [{"id": "iy0x1ax", "text": "It does have a high barrier to entry, there are a lot of large capital expenses up front.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "hadlnf3", "text": "How is it done remote? Can you specify what\u2019s managed and how you do it? How does it compare to multi family? Who\u2019s pricing and renting your spaces? What\u2019s the process of that. \n\nThanks!", "replies": [{"id": "hadsjj1", "text": "I have the site phone ported to my phone, I can take all calls no matter where I am. Management and gate access software is all SaaS so I can access it from anywhere, on any device.\n\nMy preference is to rent units in person, and have them sign the lease. You can 100% automate this but I like to have at least an initial idea of who is renting from me. I also provide keys/locksets for the units.\n\nAbout 60% is CC (which is industry low) with a percentage on auto pay. I have a drop box for physical payments and stop in when it's convenient for me to apply payments and make bank deposits.\n\nVery minimal site maintenance. I just let auctions go until I have several, and then just do them in one shot (there are also online services for this).\n\nThere is a larger facility close that is 100% automated. I poach a lot of their tenants because not having someone easy to contact when you have an issue is poor customer service.", "replies": [{"id": "hadt6g2", "text": "Don't know about MF, I have zero interest in dealing with people and their housing issues.\n\nWith non-payment, I can immediately deny access, and have their stuff auctioned and the unit flipped in 30 days (if that's the way it goes). Basic first class mail notifications, no courts, they have no real recourse but to pay or lose their stuff.\n\nI usually don't turn that fast because I make money renting space, not auctioning units. I've had good success with getting most people to pay, and also collecting late/lock out/auction fees.", "replies": [{"id": "haduh2e", "text": "How\nDo you\nPrice units and screen tenants? What are your requirements?", "replies": [{"id": "hadxzqq", "text": "\"Back in the good ol days\" I used to just call around and see what others were charging and price accordingly.\n\nThings are really weird nowadays though with the pandemic and the preponderance of rent-push software algorithms. Prices are all over the board, and crazy.\n\nI've raised prices four times this year alone, and I'm STILL low here and there I think. But, I am currently the ONLY facility in town with units. With the new expansion, I planned on a 1.8% month-over-month net occupancy increase. \n\nI've gotten a 12% net increase in the first month...", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "hadukqn", "text": "Thanks for the in depth response!\n\nInteresting you meet your tenants in person. I\u2019m sure this is to make sure who is applying is actually leasing the space. Any criteria for tenants? Credit score ? Background check?", "replies": [{"id": "hadx3hg", "text": "Personally meeting them to do the paper work is a personal foible of mine. I get a feel for them, and they have a connection with me. I feel it personalizes the transaction and now I'm a person instead of a business, and it seems they will give paying me more priority than, say the furniture rental place or the trash company if they experience financial issues.\n\nPayment for a deposit (lock/keys) and first months rent (full month, anniversary date billing), is the only thing I require.\n\nI really don't care who rents from me. If you're late with the payment, the gate automatically won't let you in (or out of you tailgated in).\n\nIf you cause facility problems, I just deny you access, terminate your lease, and require you to immediately remove your stuff (under supervision) and move on to the next renter.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "hadwdye", "text": "One of my best friends runs about 200k sq ft of self storage all of it remotely. He is in the process of standing up a 3rd party management company to help people just like you.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hadjj07", "text": "I think if you buy something that has a management company, it\u2019s usually best to keep existing management at least early on. \n\nUnless you have a good reason not to, I would advise managing things yourself and then hiring a property manager if necessary later on.  Storage is about the lowest possible maintenance property type I can imagine.", "replies": [{"id": "hadli5o", "text": "Who\u2019s dealing with price changes? Customer service? Lockouts? Move out? Move in?\n\n Do tenants do this themselves? why would you consider self storage lowest maintenance?\n\nWhat is your typical week like managing the units? Any software you recommend?", "replies": [{"id": "hadyfyg", "text": "I don't manage any storage so grain of salt.  But in other types, almost all your tenants are going to be on the premise doing stuff 5+ days a week.  That is inevitably going to create hassle for you.\n\nOffice and retail and residential tenants will complain about the HVAC when it doesn't work quite right, and even when it does, they will complain anyway.  They walk on the hallway carpets and wear them out, spill their fucking baked bean lunches on it, clog the toilet, use the electrical and wear out light bulbs and complain the new light bulbs are tinted a weird color. You have to flip breakers and plunge toilets and all that stuff way more often.  Your tenants are driving in and out every day, driving over the curb, smacking into stuff, fucking up the landscaping, dropping trash in the parking lot, and on and on and on.\n\nIndustrial tenants are a huge step up.  A bulb goes out, they replace it.  They have tools, they are handy.  They plunge the toilet instead of calling you.  \n\nStorage tenants will probably not do any of that, but they just aren't using the facility very often.  Who uses their storage unit 5 times a week?\n\n&gt;Who\u2019s dealing with price changes? Customer service? Lockouts? Move out? Move in?\n\nYou can definitely do all this stuff in a relatively limited time.  But if not, feel free to hire someone to help you out, at least to handle lockouts and customer service and answering the phone.  Teach them a little sales routine, whatever you need help with.  \n\nMy personal preference is to just hire a specific guy rather than a big professional shop.  Nearby properties (obviously not any competitors) might have a part-time guy looking for more work. \n Independent commercial brokers can be decent candidates too, that's how I found my guy.  This requires some training and time to set up but it's cheaper and easier to customize to your needs.  If you get into a dispute, he will find a way to work it out, or leave.  He does not have a 20-page contract or a legal team eager to waste everyone's time and money over some bullshit.\n\nPersonally, I have a low opinion of management companies not because they're bad guys (some are, but some of everyone is).  It's just hard to align the incentives--if you give them 4.5% of gross rent, they are not gonna worry about getting over-charged by vendors because you're paying for it.  That said, you have to price your time.  How much time will they save you, relative to how much they cost?  I generally have not found management companies to be worth it, but I've been doing it for a while, I've got a system and a part-time property manager I've known for 15 years.\n\nThat is why you should probably do it yourself for a while (again, if that's infeasible, don't kill yourself).  You will know the market, the details of your property, what the tenants are like, how much a door replacement should cost, etc.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "haf2n74", "text": "I do not own a facility, although I\u2019ve been searching, have friends and relatives with facilities, and am under contract at the moment. 99% of the work can be automated, 1% will need a part time contractor/handyman to work. Friends of mine pay ~400/month to a handyman just to swing by, pick up trash and lock out tenants once every 2 weeks. Others pay ~$1k/mo. If you do it right that should be the max you\u2019re paying on a well laid out drive up facility.", "replies": [], "depth": 1}, {"id": "hafn2fk", "text": "Checkout the William Warren group out of Cali. They do 3rd party under the Storquest name. Great company, and will improve operations, advertising, net rental / unit, etc.", "replies": [], "depth": 1}, {"id": "hh1b9jm", "text": "Late to the party but Westport Properties (US Storage Centers) out of Irvine is killing it. Really happy with them so far.", "replies": [], "depth": 1}]