Unbox 2 Self-Storage Acquisition Tips for Savvy Investing
A new year marks a prime opportunity for owner/operators to firm up their self-storage acquisition strategy to add value to their portfolio of properties. As the self-storage industry continues to grow as a lucrative real estate investment, competition grows with it, especially in major markets. And if you don’t have an advisor or management company handling the negotiations and acquisition strategy, it may be a challenge to make the proper considerations for long-term profitability. That isn’t factoring the potential pitfalls with the digital assets you’ll acquire (or won’t) with the facility/facilities in the transaction.
We’re all looking for that golden investment opportunity. To help your acquisition strategy, we’re sharing two considerations to keep in mind as you embark on acquiring the ideal self-storage facility, but with a digital marketing twist.
ISS stated that both industry growth and new supply are pushing self-storage into uncharted investment territory. While it’s any economists guess as to how long favorable market conditions will persist, we can help your investment succeed with some digital marketing considerations and helpful questions to ask that will help before the sale, and long after the fact.
Tip #1: Have a Plan in Place for Your Website Upon Acquisition
You’re feeling confident about the brick and mortar self-storage facility/facilities you just acquired. Before that ink dries, ask yourself a couple quick questions:
Are you migrating your existing self-storage facility’s website over?
Are you taking over the domain of the facility you’re purchasing?
If you’re migrating your self-storage facility’s website, you should consider…
- Optimizing your local SEO to reflect the new location
- Creating a dedicated landing page to send traffic and inquiries about the new location/acquisition
- Ensuring users won’t encounter any pesky 404 errors that create a barrier between users and your facility
If you’re inheriting the domain of the self-storage facility in the acquisition, keep in mind…
- You may own the domain, but you might not own the website itself
- You’re inheriting all the savory and unsavory tactics and practices that went into the design and performance of the website
- You’ll need to also make sure you have all admin credentials to make edits/updates as you or your agency sees fit
These are just several of a myriad of considerations concerning the digital component of your self-storage facility. If your head’s spinning from the recommendations above, the bad news is: that’s just the tip of the iceberg. Financial advisors aren’t digital marketers, but you aren’t paying them for that service, either. But these considerations are important, and will factor heavily into how successful your self-storage facility will become when you’re trying to attract tenants and increase occupancy.
Tip #2: Keep an Eye on Tenants and Occupancy
Speaking of inheriting a successful self-storage facility upon completion of the sale, be sure to ask the right questions before it’s too late. By that we mean, instances have occurred where an owner/operator is trying to maximize the profitability of the self-storage facility to potential buyers prior to the sale, and may not be as forthcoming as you’d prefer. To save from a potential bait and switch scenario, we’ve outlined areas you can probe deeper into to gain a better understanding of the facility you want to acquire.
- Historical Data: If you have access, look to uncover seasonality trends. This will help you understand when tenants are most interested in renting units, so you can plan for it. Preparing for seasonality will enable you to spend strategically and optimize during busy months, and create a plan to combat slower months
- Online Reputation: What are tenants saying about the community you’re looking to acquire online? It’s important to understand what people are saying about your facility. A negative review from years ago can still impact today’s business
- Customer Data: Who are your customers? Are they students? The elderly? Families? By understanding who your customers are, you have a greater likelihood of creating promotions and offers that will be relevant to them. This will ultimately help you retain tenants for longer periods of time
- Storage Unit Data: What storage unit sizes are most popular at the location you’re looking to acquire? Which unit sizes aren’t as popular and will need promoted to be rented? Knowing which storage units your customers are looking for will be the key to maintaining consistent occupancy levels
This initial due diligence will save future headaches. By asking the right questions prior to acquiring a new facility, you’ll avoid a faulty investment in your portfolio.
Invest in Your Ideal Self-Storage Facility with Confidence
We understand that a lot can happen during the transition period between owners/operators. And based on the graph below, featured on SpareFoot and provided by the U.S. Census Bureau, construction and spending is trending to continue rising this year. The considerations we’ve made will be relevant for some time to come, barring any drastic shifts within the sector.
Of course, you should continue following us to stay up to speed as these developments occur. No owner/operator is completely immune from falling prey to misleading information regarding the acquisition of a self-storage facility.
But asking the right questions and probing deeper if something seems awry can save both time and money. We’re here to help, so contact us with any questions and we’ll do our best to “acquire” an understanding of your specific situation to aid your acquisition strategy.