Avoiding Past-Due Rent
The more fundamental mitigating approach and, frankly, just good business practice is to consistently stay on top of tenants and not let them fall behind on their rent. Here are some pointers:
- Contact them. Send letters, postcards, e-mails and text messages and get on the phone. Having a sense of urgency can be contagious with your tenants.
- Be empathetic but firm. A willingness to listen goes a long way toward getting your rent paid vs. some other bill. However, that empathy should be coupled with conciseness about the amount owed and the consequences of not paying rent on time.
- Follow through on consequences. Rather than waive late fees, make tenants pay them. Also, use your lien rights and conduct auctions if tenants fail to meet their contractual obligations.
Maximizing Auction Results
Fortunately, steps one and two above go a long way toward keeping tenants current in their rent. However, if you are forced to conduct a lien sale, you might as well take steps to maximize each unit’s auction price. Here are some key steps:
- Advertise the event. The price at which a unit sells directly correlates with the number of auction buyers. Post a sign at the facility, put a notice on your website and, most important, advertise on a storage-auction marketing website where thousands of savvy buyers have begun to look for lien sales.
- Provide some advance notice. Posting an auction ad the day before the event will not help your cause. Buyers need time to organize their schedule, so get the advertising in place at least one to two weeks in advance.
- Post pictures. Buyers prefer knowing what to expect from a unit. Photos allow them to assess the type of vehicle required to haul away the goods and ensure they have enough cash in their pocket to appropriately bid on the unit.
- Provide content details. Although pictures are invaluable, it may be difficult to discern things such as product features, brand names and general property condition. The more descriptive details you can provide the better.
- Be transparent. Notify buyers when a particular unit sale or an entire auction event is canceled. Many attendees are professionals, and showing up to an auction unnecessarily wastes their time and money. Fortunately, a good auction-marketing website can send notifications to buyers automatically.
Staying on top of receivables is a critical task for any self-storage owner. It can ensure you get the maximum amount in your pocket when it comes time to hand over the reins of your business to a new owner. It will also reduce the chance that a deal trips up over an issue like past-due rent.
Chris Hitler is an experienced self-storage owner and broker for the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Hitler also launched RummageMarketplace.com with the aim to help self-storage operators attract more buyers to their lien-sale auctions. To reach him, call 312.404.7933.