When we used to attend Trade Shows, a common “complaint” we would hear is many storage owners were only 80-90% full. We say “complaint” because the owners/managers were trying desperately to reach the 100% mark and were asking us what more they could do. Is the best move of your self storage facility to have it completely full of customers? Read on to see why this is probably not in your best interest.
New Storage Facilities
Investors and entrepreneurs are always on the lookout for new ventures. If there is an area of 100% occupancy, the investors will take this as there is low supply and high demand. You may have just set yourself up for more competition in the area.
Wasted Time and Money
Any money you spend on growing, promoting and marketing your storage facility will be wasted because you will have to turn new customers away. The money you are paying for websites, signage, phone numbers and any other advertising is useless. Placing a customer on a wait list or telling them you will call them when something opens up will surely drive the customers to your competitors. In addition, forcing a potential renter to a competitor could come back to haunt you with negative reviews online due to your unaccommodating ways and zero vacancy.
No Room for Growth
With 100% occupancy you have no room for growth. Sure, you could take out loans or spend extra cash to add on to your storage facility but would that help? Consider how many of your renters are paying the full amount and how many are renting on promotions.
If you are running at over 85% occupancy, it might be time to raise your rates. The word has spread and your self storage facility is obviously popular, has great amenities and features and is well taken care of or you wouldn’t be full. An increase in rates likely won’t have much of an effect except to increase your bottom line. The number of renters who move out due to the increase will be offset by the number of new tenants you draw in paying the full rental price. We acknowledge, as you should as well, that raising rates can be a slippery slope. If done correctly, it can have the positive desired effect you are looking for.
Having 100% self storage occupancy may seem like a great idea but it could mean you are inviting unwanted competition, wasting time and resources or are not taking advantage of raising rates. As always, tread carefully but always search for ways to increase your profits!
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