You Gotta Collect the Rent! Tips for Making Self-Storage Collections a Little Less Painful
Copyright 2014 by Virgo Publishing.
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Posted on: 10/12/2013



 

By Pamela Alton

Collections are one of the biggest parts of a self-storage manager’s job. No matter how good a manager is at renting units, he must also be able to collect the rent in a timely manner.

Collections are definitely not considered fun. No one likes to make or receive calls saying an account is past due. So what can a manager do to make this part of his work a little less painful for him and his tenants?

Get the Facts

Collections actually begin at the time of the rental. Start by getting proper photo identification of tenants when they rent their unit. Ask the customer for a valid photo ID such as a current driver’s license, military ID or passport. If you use a card reader to record the information, don’t assume the address on the ID is current. Ask. If it’s not, add the correct address in the computer system.

If you don’t have a card reader, check the address the tenant put on his rental agreement and the one on the ID to ensure they match. Also make sure the photo ID looks like the person standing in front of you!

Always have the tenant complete the rental agreement in his own handwriting. If you ever have to go to court, you’ll have proof the customer gave you the information. If you can’t read someone’s handwriting, ask for clarification; then have him correct the information and initial the correction.

If your rental agreement doesn’t include a place for a tenant to list an alternate address, such as work or a relative, or a spot for emergency-contact information, use a separate form. If a tenant asks why you need this information, let him know it’s in case you're unable to reach him by his initial information. In reality, you may need it in the event of non-payment, for example, the stated phone numbers get disconnected or the past-due letters are returned.

In addition to getting current phone numbers, addresses and emergency information, get an e-mail address. This is just another way to make contact.

Just remember: When making collection calls, never discuss the past-due account with anyone other than the person who signed the rental agreement. You may leave a message asking the tenant call you, but do not disclose the reason for the call. Any collection efforts can only be discussed with the tenant.

Explain the Rental Agreement

Now that you have the tenant information, it’s time to explain the rental agreement. This means taking the time to clarify items including:

  • The monthly rental rate
  • When rent is due
  • What happens if the tenant becomes past due
  • When the gate code will be deactivated
  • When past-due letters are sent
  • Any fees involved
  • When a unit will be overlocked and access to the unit denied
  • When the unit will be inventoried
  • When the unit will be auctioned and the costs involved
  • What happens if the tenant still owes money after the auction

Of course, the tenant is going to say, "Oh, that will never happen. I always pay my rent on time." I’m sure you've all heard that a time or two! But as they say, "stuff happens," and sometimes even those best-paying tenants can end up past due or sold at auction.

Don’t assume a tenant is going to understand your state’s lien laws, a late letter or the costs involved with those letters. All of this must be explained at the time of the rental. Say the same thing to each and every new tenant so it becomes a habit. That way, when the customer claims, “I was never told that,” you can say with confidence, “Yes, you were told about these letters and fees when you signed the rental agreement.”

Most facilities now offer tenants the ability to pay their rental fees online or via auto-debit. If a customer elects not to use auto-debit, tell him about your facility’s online-payment options, if you offer them.

Verify the Info

After completing the rental process, mail a thank-you letter to the address on file and send an e-mail. (Most management-software programs have the ability to print a move-in welcome letter.) This will help you verify the information the tenant gave you. If the letter or e-mail comes back to the facility as undeliverable, then you know the information you have is incorrect and it’s time to take the next step. This may include removing the tenant’s gate access or overlocking his unit, which will force him to visit the office for entry. Then you can have him complete a change-of-address form. Never change a tenant’s information until you get it in writing from the person who signed the rental agreement.

Making Collection Calls

Collection calls are not a fun, but they are necessary. There are several rules of thought as to when these calls should be made, which depend on your rent due date. If rent is due on the customer's move-in date, then every day, there may be tenants who fall into the past-due category. If your is due on the first of the month, then the past-due date is the same for all tenants.

There are certain times of the month when a manager makes the majority of his past-due calls. Some managers will call a tenant before he gets the first late letter and late fee. Others will wait until the tenant get the first notifications, and then begin making calls prior to the tenant receiving a pre-lien or lien letter.

Either way, you can make the call a “positive” one by telling the tenant you're just calling to help him avoid a late fee, letting him know when the fee will be charged to the account. Remind him of your auto-debit and online payment options, if you have them. Always document any collection calls in the tenant’s file.

The winter holidays are probably the toughest season for these calls. Be persistent. The adage, “The squeaky wheel gets the grease” is too true at this time of the year!

Renting units and collecting rent go hand in hand. Collections truly begin at the time of the rental by obtaining current and verifiable tenant information. Making timely and persistent calls will make your job easier when it comes to collections.

Pamela Alton is the owner of Mini-Management Services, a nationwide manager-placement service specializing in placing self-storage management staff since 1991. For more information call 321.890.2245; visit www.mini-management.com .