Joe Downs breaks down when to self-manage your storage facility versus hiring a manager. Self-managing saves 5-8% in fees but costs 10-20 hours weekly and limits growth. Facilities under 150 units typically need self-management; over 300 units justify a full-time manager earning $35-50k or 5-8% commission.
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And welcome to day 81 of the Storage 100 series. I am your host, Joe Downs. Folks, one of the biggest decisions you'll make as a new owner, do you manage the facility yourself or do you hire someone? Today I'm going to break down when each option makes sense. And for those of you building your operator playbook, the Storage Moguls community at storagemoguls.ai, that's storagemoguls.ai, gives you AI-powered tools, multimodal learning and real content across every storage vertical, all for free. So start your journey now and advance at your own pace. And by the way, I can now officially announce a bonus when you register. Even though the community is a few weeks away from going live, the first 500 people to register will get a free Deal Analyzer GPT that we built. We use ourselves— we use this ourselves at Bellrose Group. For quick deal analysis. You get it for free. All you have to do is register. All right. Back to the question at hand here, though. Do you manage the facility yourself or do you hire a professional? Well, this choice can dictate your lifestyle and your long-term growth potential. So in this episode, we're going to break down the cold, hard math and the real-world tradeoffs for both options. This isn't just about saving money. It's about buying back your time and building a scalable business if that's what you want to do. So let's start by looking at the benefits of keeping everything in-house. So self-managing can seem like the clear winner because you can maximize control and you maximize savings. Biggest draw being you're keeping that 5 to 8% management fee. You're keeping that right in your pocket. That goes straight to your net operating income. And you also get total control over every single operational decision because you're the boss. And finally, you learn the business from the ground up, building those direct relationships with your tenants. Vendors, et cetera. But this maximum control comes with a hidden price tag that most people ignore. And the hidden costs of self-managing can sometimes quickly outweigh the perceived savings for most investors. This isn't passive income, folks. You're essentially taking on a second job, and that might demand 10 to 20 hours a week of your time. You're on call 24/7. When the gate breaks at midnight or a tenant is locked out on Sunday, you're the one driving over. So this model is impossible to scale because you become the bottleneck and you simply can't physically manage more than 2 or 3 facilities at a time unless they're all really close by. And honestly, dealing with late payers and maintenance issues every day, it's going to lead to burnout fast. So if self-managing is a trap, what does hiring a manager give us? Well, after looking at the grind of self-managing, the biggest pro of hiring a manager is simple. You buy back your time and your sanity. A professional manager fee frees you up to focus on strategy, not fixing toilets. They bring professional operations and established systems that you likely don't have yet. This is the only way to scale. So when you have a manager, you can easily add more sites because they handle the daily headaches. But this professional help is not free and it introduces a new set of risks. So while the cost of professional help is the most obvious drawback, as it directly impacts your bottom line because you're likely paying 5 to 8% of your gross revenue or a hefty annual salary, which cuts in your net operating income, you also lose direct control. You're no longer the face of the business and daily decisions are being made by someone else. And the biggest risk is the hiring risk. A bad manager can absolutely destroy your occupancy and tenant relationships faster than you can recover. And remember, you still hold the ultimate liability. So if they mess up collections or compliance, still your problem. So how do we decide which path makes the most financial sense? Well, to get a break-even analysis, you need to match your management strategy to the size of your facility because not every facility can afford a full-time manager. If you got less than 150 units, you probably don't have the revenue to justify a salary. So you need to self-manage and learn the business yourself or work out some sort of hybrid model. Once you hit that 150 to 300 unit sweet spot, you could probably bring in a part-time or commission-based manager for, I don't know, part-time, 15, 20 hours a week. When you cross the 300 unit threshold, the revenue should support more of a full-time salary situation. That's when you can professionalize your operations. And finally, if you have multiple facilities, it's time to look at a management company. You know, it's going to be worth paying them 5 to 8% to handle everything while you focus on scaling your portfolio. So what exactly should be— should you be looking for in that manager? Well, the ideal candidate profile isn't necessarily someone with 20 years of self-storage experience. They don't need all that. The experience is helpful, but you can train skills, but you can't train attitude. So the critical factor, in my opinion, is customer service skills, because this person's the face of your business. They must be friendly, patient, professional with every tenant interaction. They also need to be incredibly organized and detail-oriented because they're tracking leases, payment logs, and maintenance schedules. And finally, they must be willing to enforce the rules. I'm going to tell you right now, from my experience, the quote unquote experienced expert managers in the business were the absolute worst. It was exactly what I just said, finding someone with pep in their step, that's trainable, coachable, that has a customer-first attitude, which you just— it's innate in them. You'll know it when you see it. That's who you want to hire and train. They have to be tough enough though to handle late fees, lockouts, and evictions without flinching. And they got to be organized. A bad manager is going to let that tedious work pile up and it ultimately will hurt you and your bottom line. So This brings us to the question though of how do you pay them? Because once you find the right person, you have to decide how to structure their pay for their performance. So you have 2 main options, commission-based or salary. Commission structure typically pays 5 to 8% of the collected revenue. Primary benefit being you're in alignment. They're incentivized to, you know, as a manager to fill the units and collect rent because the more revenue the facility brings in, the higher their paycheck. On the other hand, a fixed salary usually between 35 and 50 offers stability. That can provide financial security for the manager and makes it easier for you, the owner, to budget for fixed expenses. So ultimately, though, the decision comes down to your own philosophy and the size of your facility. And all this ties back to the natural progression of ownership. So let's wrap up with a final thought on the natural progression of ownership. Then you should try to start by managing, self-managing to learn the business. And if you can't, stay as involved as you can in the early months and years, you really learn the business. Because this is how you're going to master the operations, understand your customer, and save critical cash flow in the early days. Once you truly understand the business, that's when you— maybe it's time to hire to scale. Bringing in help allows you to step away from the day-to-day and focus your time on finding the next deal and growing your portfolio. That's the path to becoming storage mogul. All right, so this is the part where I get to ask you to help us grow the community. So if you found this information helpful, please like, subscribe, and share this video specifically These aren't tongue twisters, but I'm making them seem like it. Specifically share this with someone who's currently debating whether or not they should hire a manager. All right, up next tomorrow, day 82: What self-management software actually does. You might think, well, of course it just manages the facility. It actually does so much more than that. So last thought: there's no shame in managing yourself early on, by the way. In fact, I recommend it, as, as I just did. You're going to learn things No hired manager will ever tell you, but knowing when to let go is just as important. And inside the Storage Moguls community, we help you think through these decisions with real data and real conversations. So join for free at storagemoguls.ai. Storagemoguls.ai. There's a seat waiting for you as well as a kick-ass Deal Analyzer GPT for free. See you tomorrow and see you in the community.
