Bud Spencer, a seasoned entrepreneur and proud owner of multiple self-storage facilities across Kentucky, recently shared his story and strategies in a podcast interview. His journey of diving into the self-storage business and growing it substantially is both inspiring and instructive for aspiring small business owners.
Bud and his wife, desiring proximity to family, decided to relocate from Atlanta to Kentucky. The move was a catalyst for Bud's search for new business opportunities. His family background played a crucial role, as his father and uncle ran the largest self-storage facility in the area, acquainting him with the potential of the industry.Self-storagehas been a growing niche, with increasing demand due to urbanization and downsizing.
Bud's first foray wasn't about constructing a new facility but revamping an existing one. Ignoring cautionary advice from his father, he bought a rundown facility for approximately $100,000. This derelict property, comprising three buildings, was renovated and expanded to eight buildings, proving to be a successful venture.
Over the past four to five years, Bud strategically acquired five additional facilities across rural Western Kentucky, totaling 549 units. His recent acquisition, a two-building property in Hanson, is conveniently located just five miles from his home base. Therural settingprovides an advantage with consistently high occupancy rates, averaging 95%.
Bud's pricing strategy is a delicate balance between raising rates and retaining tenants. He sends out two rate increase letters per week, giving two months notice, and raising rates incrementally. For instance, a tenant paying $50 might see an increase to $70 if the market rate is $90. This gradual approach results in less than 30% move outs.
Challenges and Management
The high occupancy comes with unique challenges. Bud emphasizes communication and a personal touch in easing tenants into rate changes. Acquisitions are a result of diligent networking and identifying fixer-upper properties that yield strong returns without aggressive post-purchase rate hikes.
Bud is mostly a one-man army, managing his portfolio effectively through DIY repairs and maintenance, while subcontracting larger projects. He estimates the capacity to self-manage up to 1,800 units while preferring incremental growth within a two-hour radius from home.
Bud advocates for buying and fixing existing facilities over new constructions to avoid premiums. His story exemplifies how a small, family-run self-storage business can thrive through hands-on management and a personalized touch.
For those considering venturing into the self-storage industry, Bud's journey is a testament to the opportunities it presents. The industry has seen asurgein recent years and small business owners can indeed carve a niche for themselves.
Bud Spencer's journey is a compelling narrative of entrepreneurship, strategy, and resilience. By turning around neglected properties and employing a customer-centric approach, Bud has created a flourishing self-storage empire in Kentucky. His story serves as a blueprint for small business owners seeking to navigate and conquer the self-storage landscape.