When Is the Perect Time to Open a Storage Facility?
If you read last week’s post about top storage construction facts and its accompanying PDF, you may be thinking about opening a storage facility in the near future. Maybe you’re already in the construction phase.
You’ve chosen your lot, laid out building plans, coordinated with the city, and begun to think about how to market your storage facility. It’s an exciting time! One question you may ask yourself as you get closer and closer to that opening date is “When is the best time to open my storage facility?”
While the answer to this question hinges on many factors, I’ve got some food for thought to consider as you go about answering it. Check them out below and let me know your thoughts!
Spring will probably provide the biggest bang
Every year, the trend across the self storage industry shows increased rentals starting as early as March or April. People are moving more, college students are making their plans for the summer, and storage space is in high demand. Many owners attribute their spike in rentals to something they changed in their storage marketing or self storage SEO, but spring is simply the time of year when your sales will be likely be at their best.
Something to consider if you plan to open in the spring is whether your priority is to get as many new occupants as you can or if you want to reap the biggest profit you can. Since the units will fill up more than any other time of year, you could sit back and let the trend bring in most of your renters. At the same time, many facilities offer some sort of grand opening special. If you were to offer a deal for your new customers, you’d probably make a much lower profit but fill your units up much faster.
You have to find a balance with a spring opening because, if you price your units too high, one of your eager competitors could snatch up your customers; if you price your units too low, you could fill up too quickly and have to turn away customers who would’ve happily paid more than customers will pay at other points during the year. My recommendation would be to open your facility with the prices set at the upper end of what you would like to charge. This method can be a good way to gauge how your market perceives your rates and lock in customers before dropping your prices. Since the trend in increased rentals remains pretty steady until around September, you’ll still have enough time to lower your rates if potential customers don’t seem willing to pay them.
Summer will land you in the middle of the action
If you open your storage facility in the middle of the summer, you may still benefit from the trend of increased rentals that began in the spring. More likely, though, you’ll be competing for what I call “second tier leads,” or people who happen to be looking for storage during peak times of the year, but probably aren’t willing to pay the higher price facilities tend to charge in the spring.
Summer seems like it would be the most stressful time to open your storage facility, which may be the biggest reason to keep you from doing so. Keep in mind that, by this point in the year, your competitors have probably snagged up the majority of interested renters. At the same time, it could be worth the gamble and may not be too late to get in on the action.
If you open early enough in the summer and your property is located near a university, you could attract a ton of college student customers. I’d recommend offering month-to-month leasing terms, student specials, and convenient features like extended access and online bill pay to attract this market. Once the summer rush ends, you can immediately begin gearing up marketing for your self storage facility to attract the college student market next year.
Additional resources on renting to college students: A 4-Step Guide to Attracting the College Student Market
Fall promotions can offset the period of decreased rentals
When I initially began researching yearly trends in storage for this article, fall seemed like the worst season to open your new storage facility. This is the time when rentals are slowing down and most properties experience an extreme decrease in sales.
However, you could use the fact that you’re a new storage facility to your advantage. Unlike spring and summer, when demand for storage is naturally higher and you can potentially charge higher rates, fall can be a good time to offset slower sales with grand opening discounts and specials.
One drawback of opening your property in the fall is that you’ll probably have less control over your occupancy rate and prices. Occupancy isn’t is the one and only factor that determines your facility’s value, so it may not be best to lease to customers at your lowest rates just to fill up your units. After all, the average self storage renter rents for 6-12 months — even when they think they’ll only be renting for one to two months.
Additional resources on value and occupancy: Revenue Management: The Short-Term and Long-Term Solution to Your Storage Facility’s Value and How to Use Your Facility’s Occupancy Rates to Maximize Profits
Winter gives you plenty of time to market and prepare
Winter gives you a similar dynamic to fall but, the way I see it, winter is the perfect time to prepare your storage facility for the spring rush. Because it’s the end of the year, you have a few months to figure out how you can welcome the spring season and garner high profits and high occupancy.
Of course, winter is also the time of holidays and inclement weather, which could make day-to-day operations difficult during the early stages of opening, a time that’s already pretty stressful. Similar to fall, you can leverage discounts to fill your units, but you’ll have to do it at the expense of higher unit rates.
Holidays also provide easy ways to keep your storage facility’s social media accounts active, a strategy that’s always important but may be particularly important when you’re trying to get your brand recognition built up.
Additional resources on social media: How to Increase Engagement on Twitter, How to Run Your Self Storage Social Media in 30 Minutes a Week, and 6 Tips for Running Your Storage Facility’s Social Media Accounts
Evaluate your situation and priorities
Just like with any business decision, the route you go really depends on what matters most to you and how you would like to see your business grow. I’ve given several thoughts to consider, but most of these are trends about the storage industry and my own opinions about them. An experienced facility owner near Arizona State University may find summer a more favorable time than a novice owner in a New England state will. Likewise, a hard-hitting operator looking to make the absolute biggest profit will strategize different than an owner who would rather fill a local storage need even if he had to take a hit off his profits to do so.
Of course, I’d love to know what you think! Are there any points you think I’ve left out? Where do you think you fall on the spectrum? And, if you’ve already opened your storage facility, when did you open? If you had to do it all over again, would you change anything? Your insight is always so helpful, so please feel free to share in the comments below!
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