Storage unit pricing is equally important for facility owners as customers, for facility owners need to ensure that their business is profitable to sustain not only their earnings but the services they provide to their existing customers too.
Public storage unit pricing also affects a facility's occupancy rate, for customers will factor the price in when selecting which facility to use for their life storage But, pricing different size units in a public storage facility is not the simplest of tasks, and many factors must be considered to ensure that the facility maintains its profitability and quality of service.
Regarding pricing for storage units in a facility, there are two principal pricing strategies that self-storage facility owners favor, market-based pricing and target-based pricing.
- Market-Based Pricing — This means that a unit’s price is based on your competitor’s prices, so you’re providing a competitive option for people looking for life storage in your area. Minor adjustments to your market-based prices can be made depending on the location, amenities, and even the size of your facility.
- Target-Based Pricing — This is setting your prices based on your desired profit margin. This requires calculating potential profit margins with regard to expected occupancy rates—which averaged 82.5% at the beginning of 2023—along with utilities, tax, administrative costs, advertising budgets, and other expenditures.
The pricing strategy that most facilities will drift toward is market-based pricing, not only because it is easier to calculate but also because it can offer a greater assurance for finding tenants as the facility’s price is assured to be close to that of their competitor’s; making them a valid option for those looking to occupy a self-storage space.
However, how you choose to price units in your storage facility is not only determined by the pricing strategy you elect to use. It also depends on numerous factors that will be unique to each facility—factors also included by customers as a part of their decision-making process.
These factors include size, location, amenities, and competitor pricing, and they will all affect the individual unit price at your facility, regardless of which pricing strategy you choose. Let’s look at these factors more closely to understand the potential impact they can have on the price of a public storage unit.