The Nick Huber Show
EP 158: Management fees and why building a sustainable management company is important
Aug 26, 2024
Explore the intricacies of management fees in the self-storage industry. Learn why investors must reevaluate the fees they charge to ensure sustainability. Discover the relationship between financial health and the resilience of management companies. This discussion emphasizes investing in talent for enhanced profitability, equipping listeners with strategies to thrive in tough economic times.
12:52
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Quick takeaways
- The success of self-storage facilities is significantly influenced by their location and visibility, particularly in high-traffic areas.
- Establishing appropriate management fees is crucial for maintaining profitability and ensuring effective management, especially during market downturns.
Deep dives
The Importance of Drive-By Traffic
Drive-by traffic plays a crucial role in the success of self-storage facilities. Facilities located on busy roads, with a traffic count of 5,000 or more vehicles per day, tend to outperform those in low-traffic areas. For example, a facility in North Georgia near a Walmart has not only achieved the highest rents in the area but continues to lease units effectively due to its prime location. This correlation suggests that visibility significantly impacts a facility's profitability, even if some lower-traffic facilities perform well for other reasons.
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