Self-Storage Tenant Background and Credit Checks
|Copyright 2014 by Virgo Publishing.|
|By: Terri and Ed Heil|
|Posted on: 01/22/2009|
Most self-storage owner and operators shudder at the thought of conducting tenant background and credit checks. Perhaps it’s the fear of losing business. Hopefully, this article will put those fears to rest.
As we started doing research on companies offering background and credit checking, the fear of loosing business diminished. We then started looking for different services that could give us software appropriate for our facility, which offers RV and boat storage along with climate- and non-climate-controlled self-storage.
We reviewed a few companies and found one that seemed to be very RV/boat centric, making it a good fit for our needs. The software allowed us to have levels of access for our employees, restricting their viewing of other people’s credit and criminal history, information we felt should be restricted to management exclusively.
Then we made a few simple decisions: Anyone with a felony criminal record would be denied, as would potential tenants in bankruptcy or collections.
The cost for the service is minimal. For our program, we only pay per occupant, a cost that we pass onto the tenant in our one-time administrative fee. Input time to activate the checks is also nominal. Perhaps most importantly, the only customers we have lost are felons and individuals with bad credit.
The way we look at it, self-storage operators can pay a minimal fee upfront to conduct background checks, or pay hundreds or even thousands of dollars for legal fees—not to mention the angst of dealing with delinquencies and lien sales. Wouldn’t it be nice if these were completely a thing of the past?
We think the secret to eliminating tension with tenants when we tell them we conduct credit checks is in how the information is presented. We explain that we do it for their protection as well as our own. Most people readily understand the practicality of keeping the self-storage site safe by eliminating felons and other questionable characters. It makes them feel protected. The ones who give you grief usually have something to hide and they are the ones you send to your competitor.
We have hundreds of people visit our facility and have only turned a way a handful. In hindsight, the few times we have lowered our standards and allowed questionable tenants in the door, we have been sorry. These are the same people who have become slow pays. Plus, one advantage of the software we selected is that you can adjust your credit standards depending on how the economy is doing.
Doing a background and credit check allows you take control of your business. The process saves you endless hours of collections and also gives you an edge on your competitors. Again remember, you can set the criteria so it fits your occupant base. The success is in how you present this to your potential occupants. Homeland security guidelines can help you understand why this process is so important.
We are always trying to find ways to increase our security and protect our facility financially. We have found that signing up for the background and credit check service has been money well spent.