What is revenue management? Simply put, it means thinking about how to maximize your self-storage facility’s rental rates while maintaining high occupancy levels. Follow the advice below to build a solid revenue-management plan to keep your rental rates in line with your specific market.
How do your prices stack up against your competitors? If you don’t know, you’re leaving money on the table. Finding this out is as simple as using a spreadsheet with your competitors’ names and phone numbers, and checking their prices at least monthly. Typically, you’ll want to track competitors within three to five miles of your facility, but you’ll learn quickly that some are more active in changing their rates than others.
Also, many storage operators post their rates online. If they don’t, you’ll need to mystery-shop them over the phone or have an employee or family member do it for you.
It’s important to note that your rates don’t need to match your highest-priced competitor. If your facility isn’t as accessible or aesthetically attractive, you may need to set your rates just under your competition. However, if you have the latest technology, full amenities and your property is nicer than your competitors, you can charge a few dollars more per month. Determining your rate schedule is both an art and a science, and you need to monitor the marketplace to make informed decisions.
Are your competitors implementing rent increases to existing tenants? While this information can be difficult to obtain, it can prove extremely valuable when designing your plan. There are several ways to acquire this information. The quickest and easiest method is to mystery shop your competitors and ask, “Do you increase your rates? How often and by how much?” If that doesn’t work, the next step might be to rent a storage unit from your competitor. Go with the smallest unit size they have, and see if they raise your rent within 13 months of renting.
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