Operating a self-storage facility during a state of emergency can be confusing, filled with anxiety and definitely scary. It’s certainly not business as usual anymore as the coronavirus (COVID-19) sweeps through the world wreaking havoc. Like me, you likely have a million questions and spend countless hours online reading about the pandemic. ISS has even created a new category on our website to corral information in blogs, news, videos, articles and more.
Most states have now instituted “stay in place” mandates, which means a swath of business have closed their doors. Self-storage, fortunately, has been deemed an “essential” business in many areas so operators can continue to serve their customers. In addition, self-storage is a business that actually has several unique characteristics that helps when facing down a pandemic. A large portion of offices are operated by small staff, which helps with the recommended social distancing. Another advantage the industry has is it’s a low-traffic service, so you’re not likely to have a dozen people visit your store at the same time.
As we navigate what’s happening day by day, sometimes hour by hour, it’s important to be proactive to safeguard yourself, staff, tenants and business. Or course that means social distancing, washing your hands and cleaning every single surface of your facility. But you also need to keep informed.
Over the last few weeks, the ISS team has heard from dozens of operators, management companies, developers, vendors and lenders about how they’re facing the challenges and disruption of COVID-19. We’ve published articles, blogs and videos, and have plenty more in the works to help you navigate these trying times. You can also reach out to the national or state self-storage associations for guidance.
One of the primary questions most operators have is “should I stay open?” This is a complicated one. Some states have plainly stated whether storage facilities can remain open, while the wording in orders from others is general and requires interpretation. Most will allow a barebones operation with at least on employee onsite. You can find these directives on your state, county and city government websites. If you do remain open, be sure to adhere to social-distancing guidelines.
Fortunately, self-storage operators have many options when it comes to interacting with customers. Many sites have kiosks or accept reservations and payments online, and others are now taking them over the phone. The “contactless” rental process is appealing to customers who are looking to keep their distance when visiting local businesses. Old-school mail slots or drop boxes are also great methods for tenants who still prefer to pay with a check or cash. Of course, you’ll need to make sure these are secure.
Another area of concern at this time revolves around staffing. A new federal leave law went into effect on April 1 to protect employees affected by the coronavirus. Private companies with fewer than 500 employees can now receive tax credits for providing paid leave taken for specified reasons related to COVID-19. There’s an exemption for businesses with less than 50 employees. It’s crucial you understand this new law and how it might affect your operation. If you’re unsure, consult your attorney or state association.
As I said before, it’s not business as usual these days and that definitely applies to late fees, lien sales and rental increases. The federal and state governments are already taking steps to protect people from losing their homes by halting foreclosures and evictions. Many have enacted orders to prohibit late fees and lockouts as well. These are happening rapidly, so be sure to keep tabs on new laws in your region.
Of course, tenants are still required to pay their rent, but it’s likely many won’t be able to this month—and maybe not next month either. As of today, the unemployment rate is hovering around 13 percent, and it’s expected to increase as more workers face furlough. In fact, 6.6 million people applied for unemployment benefits just last week!
As a self-storage owner, you have every right to take steps and collect what’s owed—either through collection efforts or lien sales—but now might not be the time to take a hard line on this. Consider putting a pin on all collections and lien sales for 60 to 90 days. You can still send a friendly reminder about payments via e-mail or text (if you have permission).
If you’ve already sent collection letters to tenant who were in default before the pandemic, consider contacting these tenants and letting them know that you’re holding off on taking action at this time. This is simple goodwill, and it’ll encourage loyalty. It shows your tenants you understand what they’re facing and you’re willing to be patient and work with them on a solution to get them caught up.
Also, consider a pause on rental increases. If you rely on your software to conduct automatic price increases, turn this off … for now. Another factor to be aware of is price-gouging laws, which many states are passing quickly.
Still have questions? Self-Storage Talk, the industry’s largest online community, is here for you. Members are discussing how the pandemic is affecting business hours, whether to be lax about late fees and postpone auctions, getting a paid, and so much more. It’s free to join.
Of course, risk management doesn’t just apply during times like these. It’s an everyday concern for self-storage operators. In just a few weeks, the May print issue of ISS will begin mailing. It contains nearly a dozen articles on how to recognize and minimize risk, from legal to insurance, cyber security and handling “what if” situations. You’ll also find articles, blogs, videos and more on our Risk Management topics page.
There’s no doubt you’re going to need to adjust your operations and your attitude during this pandemic. Follow the law but show your compassion. That could mean waiving the fee for over-the-phone payments or giving an always-late customer a few more days to make the payment. It can be difficult to determine who really needs the help but, for the next few weeks anyway, assume everyone could you use a break. Even if a customer isn’t experiencing a financial drought, he could be facing an emotional one. You just never what’s happening in someone’ else’s life, so act with kindness. You can come out of this pandemic looking like a jerk or a compassionate local business. Which one do you want to be?