One of the number one reasons people invest in self-storage, or in any real estate asset class for that matter, is the opportunity to earn 'passive income'. There are a number of ways to achieve this, some more risky than others. But the end goal for every real estate investor is the same: to own a property that is fully leased and generating stable, recurring income.
The passive aspect of real estate investing lies in your ability to let the asset work for you, allowing you to 'make money in your sleep'. Therefore, it's important to distinguish between ownership and property management.
Consider the self-storage sector: the day-to-day operations of answering calls, managing delinquencies, maintaining units, and coordinating with vendors are anything but passive. If you’re doing those things yourself, you are…doing property management. Essentially, you are operating the business in addition to owning it.
Here is how we see your options:
Embracing the role of a pure owner means entrusting the operational reins to a property management team. This delegation converts your investment into a truly passive form, despite the associated costs. The benefits, however, often outweigh these expenses. A skilled property management team can enhance your revenue through active and effective rate and occupancy strategies, potentially offering a more profitable outcome than self-management. A manager should also have a solid marketing playbook to driving bookings based on their experience across a portfolio of assets. And if you are looking to exit your investment, a managed property can be more attractive to potential buyers, simplifying the sales process by presenting a turnkey investment opportunity.
Direct management of your facility, on the other hand, has it’s own advantages. Direct involvement enables the implementation of flexible pricing strategies and tailored promotional offers, enhancing your ability to negotiate with potential customers on price and create ad hoc promotions—actions a property manager might hesitate to undertake—thereby potentially increasing customer conversion rates. Being on the front lines also streamlines decision-making for maintenance and upgrades, offering a hands-on approach that can match or surpass the efficiency of outsourced management—at the cost of your time and personal effort.
We at White Label Storage are partial toward separating management and ownership for obvious reasons, but not every strategy warrants third party management. There are ways to make management more passive, even if it’s in-house. Ultimately, the path you choose should align with your vision of ownership. Remember, the goal of investing in real estate is to leverage your assets in your favor, not to find yourself entangled in day-to-day management tasks unless that's where your passion truly lies.
Ready to transform your self-storage into a source of truly passive income? Contact us today and start your journey with White Label Storage.
