You read this correctly. How you put in your shoes in the morning is directly correlated to a loss of NOI at your property. Let me explain.
First, let’s start with the seemingly mundane — putting your shoes on. Now there is a caveat — we are talking about shoes and socks. Not talking about heels/clogs or other shoes where you don’t wear socks. And unfortunately, we are also not talking about what is somewhat common for Southern men to wear loafers without socks to achieve “the look” while somewhat oblivious to the fact that you can wear no-show socks and prevent your shoes from smelling like the love-child of rotten eggs and swamp-ass. At any rate, as usual, I digress.
Close your eyes and take yourself back to this morning. You got up. You showered and got ready. Got dressed. Now you are sitting on your bed or some stool and getting ready to put on your shoes and socks. For 99% of you, your next step is left-sock, right-sock (or visa-versa) and then left shoe, right shoe. And this is where the proverbial cheese slides off the cracker (and frankly where the entire Detroit Lions team gets it wrong). You just wasted about five seconds of your day. Had you instead did left sock, left shoe, right sock, right shoe, you save all the time and effort required in crossing/uncrossing/switching legs. Now, some of you are going to stop reading while muttering, “There’s something wrong with this guy.” Perhaps true, but bear with me if for no other reason than morbid curiosity (you rubber neck at a freeway accident, don’t you?).
Does the five seconds change your day? Probably not. But now play this out for over a year. five seconds times 365 days = 30 minutes. What if I started this by asking you, “If I could give you 30 minutes of free time to be productive or relax or spend time with family…for free…would you take it?” And all it requires is to make an effortless change to the order of how you do something.
OK, so about half the people who were about to stop reading, as well as all the rest of you, are now saying, “OK, I get it, but how is this tied to NOI?”
I am so glad you asked.
Storage units. Across our industry they sit at about 35% occupied. Why do I say “about?” Because multifamily operators reading this know that: 1. You have no idea how many you have. 2. If you do know (or think you know), you don’t have a system that stores the data well. And to whatever extent you do understand the nature of this asset within your portfolio, the process to lease these to residents is, at best, terrible. Next time you visit a property, ask how many storage units are there and how many are rented. Less than 10% of staff will be able to answer that question. Not their fault — there is no platform to manage this well.
Now do an audit. Do you know where all the storage units are within the property? Are the doors broken? Are some being “rented” under the table to residents? Are some legitimately part of a lease but no one knows this? Are there some being used to store an old collection of a Southern man’s swamp-ass smelling loafers that his wife banned from the house?
So, let’s say you audit the inventory, clean-up the leases, fix the broken units and order a case of Dr. Scholls’ foot powder for our buddy from Savannah (I don’t think they sell men’s socks in the entire city). How are you going to monetize these? Tell your staff in an environment where debt is expensive, costs are rising and there is little to no pricing power (or rents are dropping) to focus on $40 storage units? Probably not.
Now go back to putting on your shoes. What if I told you that you could rent these storage units, without committing to any expenses, with almost zero involvement from your staff? What if I told you your occupancy would increase 2% per month on average? What if I told you that while I’m picking on storage units, the same applies to carports, garages, extra parking, etc.
Those of us with a bit of gray hair have been through these cycles before and like all things, this too shall pass. The question is, if you can reduce the pain of this cycle, would you? You can keep doing sock-sock, shoe-shoe every morning instead of sock-shoe, sock-shoe, but once you know there is a better way that guarantees an improvement, why would you?