After attending many association meetings and conferences we have found few facility managers can say they have no collection issues. Since we have been using this process, though, we have not had any at our site. Yes, we have a few slow-paying occupants, but now they are all less than 21 days late.
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.