MANAGING FOR DOLLARS
|Copyright 2014 by Virgo Publishing.|
|By: Linnea Appleby|
|Posted on: 02/01/2007|
It’s no secret that each storage unit at any facility is considered the inventory of the business. It’s the income-producing real estate. Managers inventory units to make sure they’re aware of who’s in, out, paid or not paid, etc. This system enables them to manage facilities well, collect the money and run a successful business.
So why do so many storage facilities leave their vacant units unlocked? When auditing properties that subscribe to this practice, we frequently encounter units not in the system, with no lease and a tenant lock on them.
Managers respond that a specific tenant may be using the unit temporarily while rearranging his regular rental, or another customer is transferring from unit X to unit Y and taking a little longer than expected. We hear all kinds of stories like this because our industry tends to be accommodating. It’s easy for a manager to think, “The unit is empty anyway, and I have lots of others in this size, so why not let a tenant who needs it for a little while borrow it?”
Here’s my question: If you don’t lock units, what happens when you suddenly find one that is supposed to be vacant but a tenant has a lock on it? Certainly, you’ll have to go through the arduous task of finding out what’s in the unit—cutting the lock, inventorying contents and deciphering who owns the goods.
This eats up valuable time and resources, and usually involves a call to your self-storage attorney. Handled improperly, it can lead to litigation. It may be months before you can regain possession of the unit. In the meantime, no one’s paying rent or late fees for its use!
If you managed apartments, would you leave them open and let the family in apartment A use apartment B for visiting guests? If you managed the Gap clothing store, would you let a customer who bought a pair of jeans last week borrow a pair off the shelf because you had ample inventory in the same size? You might, but if you did, you’d be out of job in no time.
As an industry, we need to view storage units in the same terms as other businesses. This is our product, our inventory, our livelihood. It should be counted, verified, maintained and secured. We lock our houses, cars, file drawers, cash boxes, offices, electrical outlets and thermostats; we should certainly lock our income-producing inventory to minimize unauthorized use or theft. When units are left unlocked, tenants get the impression your inventory is valueless. Is that the message you want to send?
Keeping your vacant units locked ensures tenants can’t borrow them without your knowledge. Moreover, allowing a tenant to use space at any time without payment or lease is never a good idea. If they need the use of more space, they should pay for it. If they are moving from one unit to another, they should pay for both units until one is completely vacant. This motivates them to complete a transfer more quickly and reduce their payments, while keeping your inventory income producing.
If all units are locked, you won’t be surprised when you open a “vacant” unit and find tenants’ goods, trash or even hazardous materials “gifted” to your facility. If you don’t want to spend money on locks, use inventory seal tags that are broken off to open units. However you do it, keep your inventory secure.
When units are locked and tagged, their status—vacant or rented—can be identified at a glance. You’re protecting your inventory, the primary source of your income.
Linnea Appleby is president of PDQ Management Solutions Inc., a Sarasota, Fla.- based company providing full-service facility management, consulting, start-up services, auditing, management training and more. For more information, call 941.377.3151; visit www.pdqmanagementsolutions.com.