Acquiring an existing self-storage is beneficial for investors because the business is operational from day 1. Rather than a long process of site selection, design, and construction to achieve profitability, the business (in many cases) already has tenants and is generating revenue. Even if the business is not near capacity, but has current tenants, it is often a smoother transition to revenue generation than new construction.
There are updates to consider when purchasing an existing self-storage to increase revenue, attract new tenants, and better serve current tenants. It’s also important to spend wisely. When deciding to renovate an existing self-storage it’s important to consider necessary expenses, aesthetic upgrades, and return on investment.
Necessary Expenses
Inspect an existing property for necessary expenditures that are essential to the proper functioning of the self-storage business. These expenses include upgrades to security, access and locks, lighting, door replacement, fencing and gates, and other necessary features. A property inspection will enable you to quickly determine which issues are crucial to running your business. Deferred maintenance can be dangerous and costly. The issues that come up during inspection must be prioritized and fixed quickly.
If the self-storage does not have a great website, it’s wise to consider an upgraded website while also working on the physical aspects of the property. Web developers can work behind the scenes quickly to revamp an outdated website while you work on the property. In today’s digital world, the web presence cannot ignored.
Customers are looking for self-storage options that allow them 24/7 access to their rented units with the highest level of security available. Gating and perimeter fencing should be functioning well if they exist already. If a property does not have a gate or fence, this item can move to the list of aesthetic upgrades to add in the future.
Doors fitted with smart locks make access easier to control. Smart locks are opened with the use of an app by the tenant for 24/7 access. This makes it easy to limit access to a unit if the rent payment is late. Once the rent is current, the app allows access to the tenant. This becomes a benefit to cash flow and revenue.
If an older property needs upgraded security cameras, now is the time to add them. A hard-wired camera system is a beneficial upgrade for business owners and tenants because it provides an added layer of security. Camera systems can be affordable and easy to install. Hard-wired is preferred over a Wi-Fi system because when the Wi-Fi is down, the cameras are down.
Pay attention to things like broken or malfunctioning doors, low spots in the roof, and any other indications that repairs are needed. Broken doors mean that a unit is not rentable and that is lost income. Fix all broken doors immediately. Any roof issues should be handled quickly as well to avoid a costly issue down the road. Roof issues can lead to leaks into rented units and damaged property. If a property has potholes or dangerous spots in the concrete, these must be repaired immediately.
Aesthetic Upgrades
Once all of the necessary improvements are made, and your units are in perfect working order, other aesthetic expenses can be considered that enhance the appearance and attractiveness of the property. This is the time to consider a fresh coat of paint, landscaping, and even curb appeal. Consider competitors nearby and give the outward appearance an update to draw attention to your business.
As mentioned above, if the property does not have a gate or perimeter fence, this can be a good time to add one if the cash flow is available. Gate access and perimeter fencing provide an added layer of security that customers desire. If the business has existed without it for a time, it can be added later as a new feature that is attractive to customers.
Another aesthetic expense is to add new signage. Out with the old and in with the new sign to show customers that management has changed hands. It also reflects an investment in the property exterior. If there’s money available, this is a nice change to make.
Return on investment
Each of the items discussed so far comes with a return on investment. Smart business owners will start by completing the necessary investments that provide safety, security, and easier access to tenants. A new and enhanced website is also a necessary investment because it simplifies the ability to attract and gain new customers. A website that is outdated or difficult to navigate will turn customers away.
Curb appeal does enhance your business appearance and might attract customers, but this item provides a lower return on investment so it can be a lower priority to complete.
How do you decide?
If you’re new to the self-storage business, it can be difficult to know what to fix first on an acquisition. At Coastal Storage, we work with our clients from start to finish to ensure their success. We provide expert advice on running a self-storage that is built on decades of self-storage experience. Our clients are some of the most successful self-storage owners in the industry. We would love to work with you. Call us today at 904-591-0140 to speak with one of our experts.