Nothing lasts forever, and the same goes for self-storage facilities. You’ll need to renovate to stay competitive and to give customers peace of mind with a modern, safe, and secure experience. The process can seem overwhelming, so we’ve simplified it to help you.
Why self-storage renovations are important
You can get left behind if you’re not keeping up with the changing self-storage industry. And while you may not install every new feature, you should pay attention to nearby competition and how your facility functions. Safety and security are top concerns for tenants. If you leave gaps in services, other competitors could view this as an opportunity to seize your market share.
Knowing when to make renovations
Spending money today to remodel aspects of your business that could pose a more costly threat in the future is wise. For example, look at early signs of an aging facility that could injure a tenant or damage property. Ignoring those potential problems means you could lose business and still face a higher repair bill. And, if you’re not maximizing your market value, it might be time to make updates to increase your rates and boost property value.
Here are signs that it’s time to make renovations:
- Safety concerns - If you’re noticing that your facility is showing its age, make a list of issues to calculate repair costs. The price of not making these fixes is likely to be more expensive later. Also, it’s vital to ensure your older facility complies with the Americans with Disabilities Act (ADA).
- Security gaps - Thieves are opportunists. If you’re getting more reports of break-ins, it’s time to consider beefing up security so they don’t see your facility as an easy target.
- Lagging Rates - If your units are full, it might be time to consider renovations to improve your property’s value and garner higher rates.
- Unused space - If you’ve got extra space, contemplate expansion and diversify your unit mix with relocatable storage units.
- Modern features - If your nearby competition offers interior climate-controlled self-storage units with landscaping and curb appeal, it might be a sign that you need to make improvements before customers view your facility as outdated.
How to do renovations at your self-storage facility
Determining the need for renovations is easy. However, figuring out how to do them can get complicated. It’s best to partner with an expert like the Janus International R3 team to guide you through the process and identify potential issues before starting. They’ll also help you budget for repairs and ensure construction gets completed on schedule.
Here are the steps to planning a renovation:
- Make a checklist - Identify all existing issues and those likely to become ones soon. Then, decide how you want to address repairs. A coat of paint might cover imperfections in the short term, but it’s likely to enhance long-term problems.
- Calculate costs - You’ll want to analyze the benefits and costs of each renovation item to ensure that it makes sense for your financial future. Whether replacing roll-up doors or adding relocatable storage units, selecting the right product for upgrades is critical. Upfront costs are noteworthy, but you should also factor in the product’s durability and longevity.
- Determine ROI - Before renovating, figuring out your return on investment (ROI) is essential. You’ll want to determine if the proposed fixes will increase your return by getting new business, higher rental rates, or a future sale. For example, providing total access control with Bluetooth electronic smart locks can easily upgrade your facility’s security, warrant higher rental rates, and reduce payroll expenses. As a result, it’s an improvement that could significantly boost your profit margin over time.
- Find an expert - Most facility owners don’t have time to manage significant renovations while running their businesses. To simplify the process, it’s helpful to partner with a company with self-storage experience that can handle the projects from start to finish. In addition, they can help you communicate with customers and coordinate repairs, so it’s not a hassle.
Benefits to Renovating Your Self-Storage Facility
While there are costs associated with self-storage renovation projects, there are also significant perks. Investing in your aging facility can take advantage of various benefits, cost segregation, and insurance discounts.
- Cost segregation - Cost segregation is a tax planning tool that self-storage owners can use to increase their cash flow. When a renovation occurs, you can calculate the value of components disposed of as a loss. Then, you can write them off by depreciating specific building components and improvements over a shorter depreciation recovery period. Using this method, you could save up to $100,000 for every $1 million in building costs within the first five years of ownership. Bonus depreciation benefits are reducing at the end of 2022, so make sure you take advantage of these benefits before it’s too late.
- Insurance discounts - If you make your facility safer and more secure, you can likely earn higher insurance savings.
Making the right renovations can be a win for all. They can justify higher rental rates netting you a more significant profit and an edge in the market. And importantly, they’ll give tenants a better customer experience. If you want to discuss your renovation needs, contact the Janus R3 team today.
