Two weeks ago I started this series (Episodes 487 and 488). I think it is critical for this year given what we see in the current self-storage landscape. Effective revenue strategies are going to make the difference between well-performing assets this year and ones that fall behind due to pressures on operating expenses, as well as macro-economic pressures which were outlined in last week’s episode.
In this episode, we will discuss another important way to have a major impact on your cash flow and revenue. Let’s increase your add-on revenue in 2026 and beyond.
Let’s start with the usual suspects, then branch outward. If you do not have these, start here. If you do, let’s review and then consider some of the other alternatives I am going to suggest exploring. I would come up with a game plan to add at least one to two new income streams to offset the increased operating expenses you can expect due to rising insurance, property taxes, and marketing costs this year.
Tenant Insurance
If you do not offer tenant insurance, start. This has dramatically improved our bottom line. It is also a win for the tenants.
Now I know, it may seem scary if you are not offering it. Some of your competition perhaps doesn’t, and you are scared people will leave and relocate to their facilities. I doubt it, but if they do, let them.
Here are the facts:
- Your insurance doesn’t cover their contents.
- If they store something, it should be insured.
- They may say it’s not worth it. Then why are they storing it? Suggest to them one single month’s rent and let them use your dumpster (just kidding).
- There has been a 7-fold increase in billion-dollar climate change–driven weather events since the 1980s. The majority have occurred in the last decade. This will only continue to rise.
- If someone says their homeowner’s insurance covers their goods stored at your facility, they could be right—but may not. But if there is a claim, do they really want their homeowner’s insurance going up for a long time to cover what is being stored at your facility?
In my opinion, tenant insurance is a win-win. With tenant insurance, the tenant is covered for a nominal charge per month and you get income. Also, in the event there is a fire or weather event, you can be on their side of the table advocating for them. It can eliminate an opportunity for an adversarial relationship.
Let’s look at how it can impact your facility. Let’s say you have a 40,000 square foot facility with an average unit size of 120 square feet. That is 333 units.
Let’s say you make tenant insurance mandatory. You are charging $10 per month minimum for it (they get $2,500 in coverage and the price can go up for more coverage if they want it). If they absolutely don’t want to pay for it, they can bring a declaration page from their homeowner’s insurance company and you will remove the tenant insurance from their monthly bill.
My experience is less than 5% of people provide the declaration page, but let’s say 20% do. That is 80% penetration of tenant insurance in your facility. The minimum commission you can receive is usually around $5 per month per unit.
Here is the math:
333 x 80% = 266 units
266 x $5 = $1,330 per month
$1,330 x 12 = $15,960 per year
Could you use an additional $15,960 in cash per year?
That amount, at a 7% cap rate, will increase the value of your facility by $228,000.
Would you like an additional $228,000 in value for your facility in 2026?
Sell tenant insurance and start today.
Retail
If you have a staffed facility, I think you should always sell retail items. Why wouldn’t you?
At a minimum, there is a 50% markup.
I have said forever that I would sell TVs at my facilities if I thought people would buy them. Retail is not that hard, and we train the staff to sell.
I think the lowest-performing store we have ever had sold around $250 per month, and I have had stores that sold as much as $1,425 per month.
Let’s say you average $300 per month in sales. Your cost is around $150 and your profit is around $150.
That is an additional $1,800 per year. Might not sound like much, but for a small facility, that is an additional $25,714 in value at a 7% cap rate.
If you have a manager and an office, sell retail.
Truck Rental
For us, if we have a manager and any room at all to park a truck or two, we rent U-Hauls.
I like it because other than someone to handle it, the money goes straight to the bottom line. All we are doing is collecting money and providing customer service for U-Haul. We also get storage rentals from having U-Hauls.
We usually get between $5,000 per year on the low end all the way up to $60,000 on the high end per year from this add-on revenue source.
If you made an additional $7,500 in truck rental income in 2026, that would add an additional $107,143 of value at a 7% cap rate.
Other Potential Revenue Add-Ons
If you have all of the above add-on revenue sources, let’s expand our thinking and come up with some other potential add-ons.
In no particular order, here are a few you may not have thought about.
EV Chargers
Interestingly enough, by 2026, all brands of electric cars manufactured, which also include plug-in hybrids, will use the same type of plug for re-charging. Much like all cell phones (hello Apple) now have the same kind of cord for re-charging, EVs and plug-ins will follow.
For EV and plug-in hybrid cars manufactured earlier than 2025 or 2026, like one I have, there are—or soon will be—adapters so anyone can use a charging station.
There is usually a fee one can charge for these.
No matter the current political climate, EVs and plug-in EVs are here to stay. They will only grow in numbers.
This could be a great way to get eyeballs on your project, provide a needed service, and make money at the same time. One could even toy with the idea of charging less for customers. Just a thought.
Smart Access/Technology Up-Charge
If you have any high-tech features, such as Noke smart entry systems, you could consider having a monthly tech fee.
In my thinking, this would really need to be a function of the demographic makeup of the trade area in which the facility is located.
If the average age is, let’s say, 57 and household median income is $42,000 in the southeastern US, I doubt many would choose to pay or even bother with tech add-ons.
However, in an urban, let’s say gentrified, trade area with an average age in the 30s and median household income of $63,000 and up, it would probably work great.
Just my thoughts on the day I am writing this.
I have seen tech fees in the range of $10 to $25 per month so far.
Package Handling
Certain customers, such as medical reps, often have deliveries show up at self-storage facilities. As an owner, it might make sense to charge for this service.
We used to do it as a free service. Today we will charge anywhere from 10% to 25% more on the monthly rental rate as an add-on service fee, just depending on if we are opening units. If you are just accepting packages and the customer picks up in the office during business hours, it can be less.
No matter if you are opening units or just accepting packages, you are (1) increasing your liability and (2) incurring labor costs.
It is only right we should be compensated for this service.
Be sure to check with your attorney and insurance company and know the risks and costs of providing this service. But it could (1) allow you to rent to a long-term good commercial tenant and (2) get more rent than normal for it.
Other Potentials
I have seen self-storage owners put mailboxes in their offices like UPS stores have and charge for that service.
One could have wine storage in high-income demographic areas, especially in urban environments.
Become a drop-off and pick-up station for Amazon/Prime deliveries.
I suggest creating a goal of having two new revenue add-ons in 2026—one instituted in the first half, and one in the second half of the year.
Start with any of the more obvious ones you currently are not offering. Then expand into more creative add-ons once those are offered.
Let’s make 2026 the year you increased the revenue and value of your self-storage asset. If you are just getting in and buying your first facility, perfect. Come out of the gate with at least two of these add-ons depending on the size, land area, and management strategy of your business.
Good luck, and I look forward to hearing from you about what methods you are deploying to increase your revenue.
