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I wish I knew this when I built my first self storage. I would have $500,000 extra in my wallet!

Imagine $700 cash showing up in your wallet every Sunday morning.  That is what many self-storage owners are giving up each week because they are not taking ancillary sales seriously.

 

Self-storage ancillary income makes a huge difference in your profits now and when you sell.




 

Let’s run through the numbers for 500 units rented with a turnover rate of 20 units a month

 

$29 admin fee x 20 units rented a month =$580/month

 

Required Tenant Insurance:  500 units rented x 80% penetration x $10 profit/month = $4,000/month

 

$29 late fee assuming a good collection system including multiple text notices:

$29 x 10 late customers/month = $290/month

 

Disk lock sales:  20 units rented a month x 70% penetration $14.99/lock = $300/month

 

Box sales: 20 sales a month x $20/sale = $400/month.

 

The Grand Total = 66,840/year =$5,570 a month = $1,400 a week.

 

Even if you cut this extra profit in half because you are doing some of these things you would still be making an extra $33,000 a year = $700 extra cash deposited in your wallet every Sunday morning. It is time to be an expert!

 

At a 5-cap rate, this extra profit would mean an additional =$660,000 in profits when you sold. ($33,000/0.05)

 

If you have a  detailed written game plan on how to capture all this extra income don’t forget to include it in your proforma for your bank loan.  This along with other factors can make the difference in getting the loan or not.




Do you want to know if you qualify for a Storage Authority Franchise?

If you fill out the application (apply icon on our website) you will have your answer in 2-3 days.  Or we can have a 10-minute call today and not only will you know if you qualify, you will learn the basics of what is involved in developing and operating a self-storage business.  Give me a call or let me know a couple of good times to call you.  (Let me know the time zone - I am Eastern Standard Time)



Marc Goodin is the President of Storage Authority Franchising. www.StorageAuthorityFranchise.com  He owns 3 self-storages he designed, built, and manages. He has been helping others in the self-storage industry for over 30 years.  He can be reached at marc@StorageAuthority.com or directly at 860-830-6764 to answer your franchising, development, marketing, sales, and operations questions.  His best-selling self-storage books are available on Amazon.


 

 

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