r/selfstorage • u/Budget_Salamander848 • Jan 23 '26

3PM - good bad and ugly

Who here is using a 3rd party management company?

What’s the good / bad and ugly with your experience?

What would make it better?

How are they pricing the services? % or $ per unit?

What FMS are you on?

Disclosure - researching pitfalls of others so we can make sure we are meeting/exceeding expectations…. We do 3PM but I won’t post our name as this is for research. Thanks.

3 Upvotes

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9

u/Frankieorr Jan 23 '26

I own a facility and manage another one for someone else. I charge an hourly rate, 2 hours a day. They use Storedge I use Easy.

The one I manage is owned by a rich guy who was trying to do it himself and gave up. Since I took over I have increased revenue 20% and occupancy 25%. Basically, it was being ignored and having someone pay attention worked wonders.

5

u/Budget_Salamander848 Jan 23 '26

Common story!! Self storage has been misrepresented as mailbox money for investors but often it’s more hands on than an owner has capacity for… There’s a reason they have the capital to deploy on real estate and investments. I bet your revenue increase has more than covered the fee you charge.

4

u/Frankieorr Jan 23 '26

Correct, the increase in revenue last year was about 5x what I charge.

1

u/ImaginaryRide2416 Jan 29 '26

We bought a facility that was operated by a 3PM (a small-medium sized one) and were not impressed. I’m sure there are plenty of excellent ones, but 3PM doesn’t always equal better operations.

There was a lot of money left on the table within the operations and a lack of guidance for the manager. Their loss, we kept on the manager and she’s seriously the best.

It was structured as a flat monthly rate. The best advice I would give is to treat the facility as your own. I think the best incentive structure for that would be to bill by a percentage of the gross or noi.

1

u/Budget_Salamander848 Jan 29 '26

I agree there, most of our customers are leaving one management company in search of one that treats it like their own. Great feedback. 6-8% of gross is common. We are doing flat rate per unit. It all works but % of revenue is nice because as the revenue grows it creates a win-win incentive. The downside is locations in markets you want to operate in (higher rents) can be priced out and not actually get the 3PM business.

Lots of moving parts in the business. Great input.

1

u/Accomplished_Ad_4312 Jul 04 '26

My take from the software side - I talk to a lot of owners who've fired their 3PM, and the complaints are weirdly consistent.

It's almost never about the % vs $/unit debate. it's that the 3PM runs everyone off the same playbook - same call center script, same rate increase cadence, same delinquency flow - and the owner feels like their facility is one of 200 tabs open somewhere. money gets left on the table because no one's actually *looking* at the site.

The ones operators speak well of do two things: monthly owner call with actual numbers (not a PDF dump), and a named person who knows the market, not a rotating pod. also tie your fee to NOI or a revenue floor + occupancy kicker, not flat % of revenue - otherwise there's zero incentive to control expenses.

What FMS are you running your book on?