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De-Stressing the Self-Storage Collections Process: A Guide for Facility Managers

Contacting past-due customers to discuss their account or collect payment can be a stressful part of a self-storage manager’s job. Here are some ways to streamline the collections process and improve your success rate.

Donna Edwards

February 25, 2018

6 Min Read
De-Stressing the Self-Storage Collections Process: A Guide for Facility Managers

While there are some aspects of running a self-storage facility that can be fun, collections are a task dreaded by many managers. Contacting past-due customers can be stressful. However, not all tenants who fall behind are having financial difficulties. Some simply aren’t good at keeping track of their monthly bills. Consider the following to streamline your collections process and improve your success rate.

Be Clear

During move-in, be clear about your payment policies and thoroughly explain the default process. Tell your new customer about late fees, what it means to be in lien status, what happens if a unit goes to auction, and other charges so he’ll know what will happen if he becomes past due. Then give him an opportunity to ask questions.

Follow up with a welcome e-mail and repeat these policies. If the information is presented to the customer during lease signing and again in a follow-up message, you’ll know it was covered twice, even if customer doesn’t remember it.

When working with past-due customers, be sympathetic to their circumstances, but refer to the lease. It’s a legal, binding document and the terms are spelled out. Make it clear his belongings will be sold if he ignores the bill.

Be Friendly

To make the rent-collection process easier, get to know your customers. Talk with them while they’re on the property. Building a positive rapport will make it easier to discuss their account, particularly if they fall behind.

Sometimes a customer simply forgets to pay a bill. When you reach out to him in a friendly manner, particularly after you’ve developed a relationship, he’ll respond quickly. Other times, your tenant could be having a hard time. In this case, be pleasant and explain the late-fee and default process. This will often motivate him to get caught up. If he’s ignoring your phone calls, e-mails or texts, then it’s time to get more serious.

Be Consistent

When it comes to delinquent accounts, consistency is key. Make collections a part of your weekly routine. Put it on your calendar as a Tuesday/Thursday/Saturday or Monday/Wednesday/Friday task. Make phone calls one day, send an e-mail on another, text on the next contact day, and then send a notice by mail. Repeat as needed. Here’s a summary of how to use each method:

  • Phone: Call the home and/or cell phone and leave a message if no one answers. After several messages, call the work phone, emergency contacts and alternate numbers, asking for your customer to call you. Try to reach late-payers at different times of day, which gives you a better chance of tracking them down. If you only call in the morning and they work until 5 p.m., they may not get your message until after your office is closed. Stay late one evening to call past-due accounts.

  • Snail mail: For the cost of a stamp, piece of paper and envelope, you may discover your customer has moved. Make sure you have up-to-date contact information, as it will be useful if you must send Certified letters.

  • E-mail: Using the same procedure as with phone calls, send e-mails at different times of day. The customer might not check e-mail in the morning but may do so after dinner. If he has a bunch of messages to read, you want yours near the top. Use a clear subject line to let him know it’s important he opens the e-mail and responds.

  • Registered e-mail: When you send registered e-mail, you receive a record of when it’s sent, when it’s delivered to the customer’s mailbox and when it’s opened. You’ll also receive a message if the message was undeliverable.

  • Text message: Are you set up to text through your system? If your state law allows it and you have permission from the customer, you can send a text asking him to contact you regarding his unit/account.

  • Social media messages (private, not public): If your storage business has a Twitter, Facebook or other social media account, reach out to your late-payer via private message and ask him to contact you regarding his account.

Be Thorough

Attempt to contact past-due customers at least a few times each week and reach out in several ways. Keep a record of your efforts. Impart a sense of urgency so they don’t ignore your attempts to contact them.

Start your outreach as a friendly reminder. Your message might say, “Oops, did you forget?” From there, get more determined each week so by the end of the month, you’re all business when you discuss lien fees, scheduled auctions, the lock-cut fee, Certified letter fee, etc. Be perfectly clear to these tenants that time’s running out to save their belongings.

If you have customers who are chronically late, send reminders that their rent is now due or late fees are posting soon. If they still haven’t responded by the end of the month, send another reminder. These various attempts should all be documented in their account notes.

Be Flexible

If your business allows it, offer options to assist the customer in getting caught up on rent or moving out of the unit so you can rent it to someone else. Here are some options:

  • Settlement agreement: Take a partial payment and have the person empty the unit within a specific period.

  • Payment plan: Offer a weekly or bi-weekly payment plan to help the tenant catch up. However, make it clear that if he misses one payment, the unit is automatically rescheduled for auction and full payment is required to stop the sale.

  • Abandonment agreement: Give your customer the option to sign over the unit and its contents to your facility. Then you can dispose, sell, donate or auction the belongings. This enables you to make the unit rentable for a paying customer.

Once a customer is in lien/auction status, continue to go through all the steps, even if you think you’ll get a settlement or a payment. This way you’re covered if he doesn’t follow through. If the customer is making payments, you can always delay the auction to give him a chance to catch up.

When all else fails, send the account to a collection agency. Sometimes the fear of a bad credit report is enough to spur customers into action. Don’t just use it as a threat. Follow through if for no other reason than the customer will learn there are consequences to not paying. It may prevent it from happening again at another facility.

Unfortunately, for some self-storage customers, out of sight is out of mind. People will pay their car payment, cell-phone bill, electricity or rent, but they tend to forget about their storage unit. It isn’t a priority, especially if their stored items aren’t of high monetary or sentimental value. In some cases, customers don’t pay their bill until they’re at risk of losing their goods. However, a storage bill needs to be just as important as any other expense.

Donna Edwards is a manager at Plantation Self Storage in Bluffton, S.C., which is operated by Southeast Management Co. She joined the company in 2013 and has more than 10 years of experience in property management. Her marketing experience includes setting budgets, designing marketing plans, and creating all types of advertising. For more information, call 843.815.8000; e-mail [email protected]; visit www.southeastmanagementcompany.com

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