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My Move to Contactless Rentals: An Iowa Self-Storage Owner Shares His Story

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The pandemic has led many self-storage operators to consider the merits of contactless rentals. An owner of three Iowa facilities explains why he made the switch, how he leveraged technology to do it, and how it has helped his business.

The coronavirus has forced self-storage operators like me to update our rental processes if we wish to protect our employees and customers. My company has three facilities in Iowa, and we closed all of them to in-person transactions on March 16. I don’t think we’ll be in a position to reopen until summer or fall, if at all.

So, we’ve had to change the way we do things. Here’s how we shifted to a more technological approach and contactless rentals, and the positive impact it’s had on our business.

Before the Pandemic

Prior to 2020, we completed all our self-storage rentals in person. I preferred this approach, as it allowed me to read through the most important parts of our rental agreement with customers and ensure they understood everything. It also gave me and my manager a chance to make a personal connection with renters. We could give them a tour, explain how our doors and gates worked, and offer them tenant-protection coverage, locks and moving supplies. We’d been doing things this way since our first building went up in 1995.

When we switched to cloud-based management software in 2017, we allowed online reservations, but not rentals. But by the end of 2019, I was seeing a dip in activity, and I attributed it to my competition offering options we didn’t have. In January 2020, I started testing online rentals at one of my locations.

We had a bumpy start because at first, I wasn’t receiving notifications when transactions were complete. This was a big deal to me because I wanted to reach out new customers soon after the rental. Thankfully, my software provider worked out the issue, and with a few minor tweaks, I was offering online rentals across all three locations by February.

At the time, one my employees of five years was moving on to a new job. We’ve always been a small, family-run business, which has made it difficult to hire and fire staff. I had listings on job-recruitment boards, but in the end, I didn’t find anyone I wanted to hire. I was suddenly running three locations on my own. This motivated me to make changes that allowed more automation.

The Shift

I had made several operational upgrades not long before the pandemic that had the unintended side effect of well-positioning my facilities to deal with COVID-19. First, I replaced our legacy Internet and phone connections in 2019 with fiber and a VoIP system. The latter allowed call-transferring with ease, and I set up a virtual attendant to answer all calls.

At first, I created different attendant messages for when the office was open and not; but I soon found that once customers heard we were closed, they stopped listening and would just hang up. They didn’t leave a message and, ultimately, moved on to my competition. After coming to this realization, I extended the hours that my open message was played and forwarded calls to my cell phone when the office was closed, which made a big difference.

When the pandemic hit, it was an easy decision to close our offices. I had close family members in dire health for whom I was the primary caregiver, and my maintenance person is a multi-round cancer survivor. So, we shut our doors. Our online rentals were functioning, and the new phone system made working from home a breeze. For the most part, all my customers understood, and I didn’t face any issues.

The Positive Effects

I’m not too proud to admit that 2019 wasn’t great for my facilities. Revenue improved over 2018, but the year-over-year increase was the worse I’d ever seen. Vacancies were up and, at the end of the year, I had more than 90 empty units. This is what ultimately forced the technological changes in my operational approach.

The shift I made in early 2020 had an immediate positive impact. Each month, I chipped away at my inventory of empty units. By July, I’d reached 100 percent occupancy across all my locations for the first time ever. I can’t be sure if it was my increased phone hours or online rentals, but I know both played a vital role. At the time of this writing, I expect 2020 to end with a 10 percent year-over-year increase in revenue, making it our best year yet!

The Challenges

You might think that with increased occupancy and revenue that everything was hunky-dory, but it wasn’t—not entirely. Online rentals brought benefits but also a new set of challenges.

I immediately noticed that no one was reading the rental agreement. It didn’t matter that tenants had to initial in eight places before signing—they didn’t read it. I suppose this shouldn’t be a big surprise. I mean, how many times have you just clicked “accept” to the terms and conditions on a website without reading them first? As a result, I ended up with numerous renters who missed their first payment date, including some who mistakenly believed that when they saved their payment information to their account, they were automatically enrolled in autopay, though they hadn’t actually opted in.

Obviously, I loved the increase in performance, but none of our new tenants knew the rules of the land, and that needed to change. I was also losing my personal connection to customers. With people renting and paying online, I never got the chance to sell them merchandise or offer tenant-protection coverage. Plus, I was seeing a large increase in crappy padlocks on my units, in violation of the rental agreement.

This prompted me to make a few adjustments:

  • I altered the automated notices my software allows me to send new renters via email or text to include more information.
  • I now cover all sections of the rental agreement with new tenants by phone. This extended conversation has helped me regain a little bit of rapport.
  • Every new customer gets an email containing a facility map with his unit highlighted, a confirmation of the unit number and a gate code.
  • When I see a tenant using a weak lock on his units, I contact him to discuss adding a better one. Sometimes I simply place a new lock in the unit, mail him the keys and charge his account.
  • I’ve asked tenants who want to drop of payments to use a check or money order. Phone payments have increased significantly, so I’m thinking about charging a fee for these to encourage people to use the online platform, which is free.

I have met with customers on numerous occasions since the pandemic started, but none of those interactions have taken place in my offices. Rather, I meet with them on the facility grounds and maintain social distancing. If we enter a hallway, everyone wears a mask.

Looking Ahead

With no official office hours, I’m seeking more time-saving methods. In fact, I recently began testing a new tech-based locking system. I’m hoping I can place retail merchandise inside a vacant unit secured by this new automation, so when a tenant arrives on site, I can simply grant him access. I’m also testing how these locks can deny access to past-due tenants.

Shortly after closing my management offices, I took down my help-wanted listing. Should I even consider reopening my office once the pandemic clears? My new operational processes have freed up time for more important tasks. Rentals and revenue are up. Maybe this is a sign of how I should run my business moving forward, using technology to create opportunity, flexibility and freedom.

Randy Lucore, president of CR Area Storage, has been in the self-storage industry for more than 20 years. He operates three facilities in Iowa, in Cedar Rapids, Marion and Palo. To reach him, e-mail [email protected].

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