Timing of Your Self-Storage Rental Agreement Review
By Jim Chiswell
After being involved in the self-storage industry for the past 28 years, folks are always asking me for industry “rules of thumb” to follow. How much can I pay for vacant ground? Is the expense ratio always 35 percent of gross revenue? Can I anticipate I will lease up at 7 percent to 8 percent a month? Can I always get a 35 percent to 40 percent premium for my heated and cooled units over my standard unit rates? Etc. Etc.
While you can approach many aspects of our business with intelligent ranges and ratios, I honestly feel every new development project/conversion or acquisition is a snowflake. No two are exactly the same.
I’ve found, however, one universal principle when it comes to this question: “When will I know it’s time to review my rental agreement?”
If the following appears at the bottom of your rental agreement, you need to get it reviewed quickly!
If you don’t get it, drop me note and I’ll explain! There has been just too much legislation and litigation in the past two decades to ignore the document that permanently establishes the legal relationship between you and your customers. Folks, you have so much on the line financially that the minor expense to have a competent attorney review and update your rental agreement is pocket change. Just make sure you select counsel that really understands our industry. Don’t pay for any “on the job legal training.”
If you’re fortunate to work in Texas, you just can’t go wrong with the Texas Self Storage Association’s Standardized Agreements. But most of us don’t have the luxury of a tried and true state-wide agreement.
Jim Chiswell is an industry veteran and owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence, mentoring and customized manager training for the self-storage industry. He has served for a number of years on the Inside Self-Storage Editorial Advisory Board, is a moderator on the SelfStorageTalk.com interactive online community and is faculty member of the Self-Storage Training Institute. He can be reached at email@example.com or www.selfstorageconsulting.com.
- Self-Storage REIT Strategic Storage Trust Reports 2Q 2014 Financial Results
- Self-Storage Proposal Stirs Controversy at Conway, AR, Planning Meeting
- Safeguard Self Storage Expands With Drive-Up Units to Miami Facility
- Inside Self-Storage Releases 2014 ‘Big and Bold’ Design Image Gallery
- Less Mess Storage Chairman Discusses European Self-Storage Expansion, Investment Opportunities