How can new investors get started in the self-storage industry? What technologies are transforming the self-storage industry? What are the biggest challenges in self-storage management? Amy Jenkins and Kathryn East, co-founders of Omni Asset Management Group, share their knowledge.
Read the entire interview here: https://tinyurl.com/mrxzdtu9
What are some of the biggest things that we should keep in mind with regard to evaluating a property and managing it?
Kathryn: Those two can be spoken of simultaneously, when you think about it. It's generally the third-largest expense that you have, and it's the most controllable one. If you have a facility that's 120 units, and you're trying to get to a 35% ratio, but the taxes are 15% of the money that you can spend, management is what's going to go out the window. That's how that affects the underwriting side of it: the evaluating. And I find it's the same issue whenever we're reading these OM's. Pro forma is pro forma. You need to know what that property is worth today. That is the current retail value of that property. What you're doing with your pro forma or your projections is based on the history of the underwriting process and nothing else.
Now, population growth helps, not being supply-indexed out to the max does help. StorTrack has now put in a whole other section where you can see where brand-new housing developments are going in the markets. That's powerful to know, especially when you're looking at facilities in a market. You do want to know where all that new housing is going. And it'll tell you if it's multi-family, single-family, or apartments.
Amy: automation isn't a one-size-fits-all. You have to do that market research to ensure that the model fits that location. Do you have the right technology in place? Are you using a kiosk, smart locks, and a security system? How does that maintain that smooth transition for a tenant experience? Who's going to handle that maintenance? Who's going to handle that oversight? Is this all going to transition and improve the facility's efficiency? And ultimately, the bottom line, because we all know and understand that anybody can buy a facility, what is the end game?
Kathryn: Most of the AI-generated things right now are free to use for your facilities. The question is, where do you get it? How do you know which one to use? That's why I'm excited that Amy and I are so AI-driven. I've been using ChatGPT for two years.
Amy: What works for a 45 to 100 unit facility does not work for a 700 to 800 unit facility.
Is there anything else that you think is important for our audience to know?
Kathryn: They should be going to state association meetings or to national meetings. If you're not even in self-storage yet, you should be telling people that you're looking for self-storage. You should be broadcasting that from every place you possibly can.
In the ISS (Inside Self Storage) conference this week, I guarantee you that in that vendor hall, there are going to be at least 20 vendors that are strictly AI-driven. But you don't know about it unless you start actually going out there and actively getting involved in it. Go to your local self-storage facility. Talk to the manager there. If there's no manager, call their number, see if somebody answers. Start learning the verbiage for the love of goodness. Every time I hear somebody say that they're buying a unit and I've never sold a unit, the unit stays. But make sure that when you're out there, you're telling everybody, I want self-storage. You never know who you're going to run into.
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