Article: Resident Managers; A Thing of the Past?

 

When we first entered the self storage business over 20 years ago, you could not find a self-storage facility (or mini storage, as it was called at the time) that did not retain the services of a resident management couple.  The couple was usually retired, and their small salary was a supplement to a retirement income. The wife stayed in the office and took care of the leasing and paper work, and the husband did all the outside maintenance, cleaning and yard work. They were happy to have a residence that usually cost them nothing, or nor next to nothing. The fundamental securitycomponent was a tall fence surrounding the property with access controlled gates or, at the very least, a gate that locked at night. Boy, have times changed!

 

As we survey the current self-storage landscape, we are seeing fewer facilities that have resident managers.  Are they a thing of the past? Well…maybe. Times have certainly changed and there may not be a need for a resident manager any longer.  There are many issues to be considered before deciding whether or not to employ on-site management.

 

This is the bottom line consideration when developing a self- storage project.  Building an apartment costs approximately $75.00 to $100.00 per square foot. If you eliminate the need for a residence, you could realize construction savings of up to $100,000. Insurance costs can be lowered, as well as the cost of utilities that go along with someone living on the property.

 

The security industry has come a long way in the last 20 years. I am amazed at the innovations that I see at every convention or trade show. The introduction of digital cameras, DVRs, door alarms, and controlled gate access has heightened the impression of security to the customer.  There is even a gate system incorporating an after-hour keypad button that will allow a patron to be connected to the on-call manager or answering service. The perception that a couple is on-site watching the tenant’s possessions is no longer required. We have also entered a new era and have created a generation that has become accustomed to seeing and living with technology that provides us safety and security on the internet, in banking and even in schools.

 

I have in my employment both management couples, and individual managers that work as a team. There are pros and cons to both. However, I will admit that it appears to be getting harder to find qualified management couples who wish to work together and live on-site.  You can also encounter problems unique to the work-together couple. Couples will need the same day off, so a relief manager must be employed. Couples will vacation together. If one is hospitalized, both are understandably absent. And unfortunately, embezzlement becomes an easier proposition when a couple lives on-site.

 

On the “pro” side: the presence of resident managers can become a persuasive seller by enabling the client to feel that their “stuff” is being personally watched. Also, couples have usually learned to work and live together, hence there are fewer disagreements involving the owner or management company. I have found that most of our management couples are very loyal and are more concerned about the welfare of the business because they live on-site.

Hiring individuals also has its pros and cons.  By omitting the cost of apartment construction, you can pay an off-site manager a higher salary. This may attract an applicant with a little more experience and motivation. Schedules become more flexible by hiring two separate managers that are not living on-site. Relief managers are usually not required.  Vacations can be scheduled separately with out interfering with the operation of the facility. Accountability may be augmented with two individuals that are not married or living together. 

On the downside, compatibility may be difficult. I’ve experienced more problems with individual managers getting along, as finding that great personality fit is no easy task.  At the start, you must determine how commissions and duties are divided so that no one feels mistreated. My experience has been that individual managers freely move from one company to another since they are not losing their resident if they leave a company.

Are resident managers a thing of the past? The industry seems to be moving in that direction. However, enough facilities with apartments have been built over the years to probably keep management couples living on-site for years to come.  In the end, there is one undeniable truth: The best built facility, with or without an apartment, doesn’t lease itself. It is, and always will be, the quality of the manager that makes the difference!