Gavin Shields shows how a 20% rent increase over two years can add £96k in annual revenue and £1-2 million to a self-storage site's valuation. With 250 units at £200 per month, the profit boost costs nothing extra to deliver, making dynamic pricing essential for owners planning a sale or refinance.
Chapters
Let's look at some actual numbers and what this means. So if you can raise your rents through existing customer rent increases and dynamic pricing by 20%, which is less than was in those 2 charts, if you can do it by 20% over a 2-year period, then on this example, you've got 250 units, you're 80% full, it's £200 a unit. Let's just say you maintain your occupancy at 80%. You would grow your revenue by £480,000. a year, £480,000 a year, £576,000 a year. And that's a £96,000 a year increase, 20% increase to your revenue by driving up that price over time. That's a significant amount of money, obviously, and because there's no additional cost to providing this, it goes straight to the bottom line. There's almost £100,000 of additional profit. It's very attractive to get that. But what I think is the real kicker when you really sort of think about What's the impact of this? It's the valuation of the business. If you ever do want to sell or go to sell or raising debt, whatever, there's going to be a valuation on your site and your business. And that is where this really kicks in. So, at a 10 to 20x multiple of EBITDA, you're talking about just from turning this on, an additional £1 to £2 million additional valuation on this site alone, which I just think is just such a fascinating and compelling number when we think about how we're running our business going forward. So that's why this, for me, it really does matter that we talk about this and we have it as a tool that we can use in our businesses as well.
