What Would You Do? Tips for Managing Your Self-Storage Mulah

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The majority of respondents say rental increases are handled systematically, and they stick to some kind of annual calendar or other mile mark. “We raise rents on the yearly anniversary, like clockwork,” say Richard and Beverly Haessler (RichardandBeverly), SST members and resident managers at Park Inn Storage in Odessa, Texas.

Even though rental increases are a mandatory part of being a manager, Kudo reminds operators to keep them in check. “Once a year is sufficient if you do your homework prior to raising rates. There is nothing worse than raising rates, then three months later doing it again. But I am grateful for the competitors that do business this way; it means more dissatisfied customers for them, which equates to more happy customers for us!”

Above all, be honest with customers, cautions the Oklahoma manager. “Honesty with customers as well as showing how you are investing the customer's money goes a long way to making rent increases palatable.”

What SHOULD you do?

Appleby: Understand the requirements of the law and do it. Some states require 30 days notice and/or a method of delivering the notice. Train the staff on how to overcome and handle increase objections. Rent increases are a standard part of this business. When done properly, they not only increase income but create vacancy where needed. Giving managers some authority to reduce an increase if a tenant complains is a great way to get more money for the unit, retain the customer and create goodwill.

Bledsoe: All tenants receive an annual increase, and at some properties, we may have more aggressive rate-increase plans depending on occupancy. Rent increases are a part of our business plan to optimize revenue for the investors we work with on a monthly basis.

What would you do if a tenant told you he couldn’t pay rent because of some hardship?

Listening is key when to comes to dealing with a tenant who can’t pay. “Listen carefully to what the tenant is saying, read body their language, watch their face while they are talking, and make a judgment on what their story is,” says Bob Taylor (astro), an SST moderator and facility manager of Blue Ridge Self Storage in Cashiers, N.C. “If you believe them, make every effort to help them out—free month's rent, discount, whatever.”

The next step is finding a payment solution that will help the tenant but still get the bill paid in the long run, says Robert Madsen (Madman), an SST moderator and president of U-Lock Mini Storage in Surrey, British Columbia, Canada. “Sometimes it's a payment plan, downsizing or disposal of some of the goods.”

Operators should also make a record of the transaction. “We formalize any new payment plan in writing, always lining it up with the lease in mind. If the tenant doesn't meet his agreement or lies, it doesn't make us want to reward the behavior,” Madsen says.

Lying about the hardship is a deal-breaker for most operators. “Once I feel taken advantage of, lied to, etc., I won’t go out of the way to help that customer anymore,” says SST member rich-pms. Conversely, tenants will remember the manager’s actions. “I've worked with several customers that got themselves out of the hole they were in and still thanked me months later!"

What SHOULD you do?

Appleby: Storage operators are in business for the money, but sometimes it’s hard to not get caught up in the drama of a tenant’s life. The solution depends on the situation, but the goal is always the same: to get the unit back and re-rent it to a paying customer.

Understanding the nature of the hardship will set the course. Is it short- or long-term? Are they expecting a tax refund or insurance settlement? If they can provide a date as to when they will pay, create a payment plan so you both have a firm expectation of when the payment will come. If there seems to be no long-term solution, make a deal for part of the balance due with the understanding that they move out within 24 hours.

Ballard: Sometimes you have to counsel the customer in getting rid of their storage unit, since they obviously won't be able to afford it. I recently overheard one manager working with a customer to get him into a smaller unit since the customer indicated he did not have a full unit. The manager was also helping him get current on his bill so we could assist him in transferring to a smaller unit. The manager was very artful in dealing with the customer and making sure he got the account current, then helping reduce the payment and unit size for the customer going forward.

If a manager has seen the customer cannot handle the payments, he can suggest a myriad of things to get him current and help him reduce the obligation going forward—anything to avoid selling the unit at auction. Sometimes when we see a customer chronically late, we ask if there’s anyone he knows who will let him store for free, or someone at his church or work who would help him so he doesn’t need to rent storage and pile up debt. Some of our teams are super at collecting all accounts prior to auction each month, as they’re passionate about not letting customers get to auction.

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