|The Inside Scoop|
When, How Much to Raise Rent? Self-Storage Talk Provides Answers, Ideas
A delicate challenge among self-storage managers and operators is determining when and how much to raise rent. It's an even more delicate challenge when your most loyal and long-term customers are involved, the ones who pay on time and don't cause problems. On the other hand, raising rent to correspond with market value is an integral part of a facility's revenue. Fortunately, many managers and operators don't mind lending their insight and opinions about this dilemma, and they're doing it right now on a discussion thread and poll on Self-Storage Talk.
Self-Storage Talk, the industry's largest online community and the official forum of Inside Self-Storage, is an excellent outlet for industry pros to take questions such as these, as member loftisstorage did by starting the thread. In early poll results, more than 68 percent of respondents raise rent on long-term tenants once a year. Interestingly enough, more than 21 percent don't increase rent on long-term tenants at all, opting to honor customer loyalty by locking them in at a rate.
In the discussion, JamestownStorage#8 discussed her former facility, where it took two and a half years of her tenure for a rent increase for long-term tenants to occur. Rent went up $10 a month across the board. Some tenants complained, but only one vacated. Member Lisa T took a different approach at her facility, implementing a flat, percentage-based increase on all tenants. The rationale behind such an increase is that the low-rent tenants are more likely to fuss and moan than the high-rent tenants, who are more important to the revenue stream, anyway. She suggests selecting a percentage and then rounding up the new rates to an even dollar amount.
Want to jump into the discussion? You can post a response or at least vote in the poll here. If you have a different question, you can also post it in the Polls section. But to do any of this, you must be a registered member. Registration is free and takes only a few minutes.