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Collections are an important part of self-storage revenue management, but smart facility operators do everything in their power to prevent tenant delinquency from ever occurring. Here are five ways you can use technology to lower—and possibly eliminate—late and no-show payments.

Marie Williams

March 30, 2023

5 Min Read
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Collecting rent is a crucial part of any self-storage operation, whereas late payments result in delayed revenue and higher operational costs. So, it makes sense for facility operators to ensure the payment process is as frictionless as possible and encourage customers to pay their bill on time. Thankfully, you can leverage automation tools to streamline rental payments and—when necessary—the collections effort. Following are five ways you can use technology to lower tenant delinquencies.

1. Automatic Payments

Offering autopay will decrease self-storage delinquencies. Most customers have several bills to pay each month, so it can be easy for them to overlook some accounts. In fact, according to a 2018 study published by software firm Rentec Direct, 57% of house renters who didn’t have an option to make automatic payments wound up paying a late fee during the course of a year. Out of 135,000 tenants surveyed, only 10,000 had an autopay option. Further, many property managers who had the software to set up automatic payments failed to do so, even though they could have done it at no additional cost.

If you’re already using a self-storage management software, it likely offers autopay, so make sure you’re taking advantage of it. No business operator likes to track down payments. Giving your self-storage tenants the option to set up autopay can provide all of you peace of mind. It also increases operational efficiency because it cuts out the need to process cash or checks.

2. Integrated Access Control

Investing in technologies that enhance your self-storage access-control system can also help you monitor payments and decrease delinquency. Look for a cloud-based system that’ll integrate with your facility-management software. With the right setup, tenants can be granted or denied access based on their payment status.

Today’s access-control solutions also allow for customization. For example, some can alert self-storage managers when particular tenants are on site, which can make collections easier and help ensure outstanding balances are paid before a delinquent customer tries to access their unit. Notification can come via email, text, mobile app or whatever method the operator prefers. This feature can also enhance operational efficiency because managers can monitor tenant actions on site even if they aren’t present themselves.

3. Unit Security

Of course, it’s vital to have layers to your self-storage security strategy. Even if the main entrance gate is set to deny access to delinquent tenants, it’s possible for the keypad to malfunction or one customer to tailgate behind another to enter the premises. Adding electronic smart locks that can communicate with your management software helps provide an extra level of security and acts as a non-payment deterrent.

In short, smart locks automate the overlocking process to ensure delinquent tenants can’t access their space. This feature lends itself to long-term cost savings because facility operators don’t have to spend time manually locking and unlocking overdue units.

4. Mobile App

You can also use a mobile app that allows tenants to easily make payments using their smartphone. Let’s say a customer is having dinner with friends and it dawns on them that their self-storage rent is due the next day. A mobile app is a quick,. convenient way for them to stay current without having to visit the facility.

Consider as well that a significant portion of the population now prefers to manage finances through mobile banking. In 2017, 37% of households used online banking as their primary means of account access compared to 15.1% that relied on mobile access, according to a 2021 survey conducted the Federal Deposit Insurance Corp. Last year, however, 22% primarily used online banking, while mobile access jumped to 43.5%.

It's also worth noting that this shift isn’t limited by age. An estimated 48% of Baby Boomers, for example, use some form of digital banking (online or mobile), according to Bankrate.com. Thus, the potential learning curve for some self-storage tenants isn’t as steep as you may think!

The takeaway is offering mobile payments creates convenience. You don’t have to get rid of traditional payments via cash or check, but it’s essential to provide multiple options to help lower tenant delinquency. Consider as well that these types of modern conveniences attract more customers.

5. Multi-Channel Communication

Another effective strategy is to use multiple channels to communicate with your self-storage tenants. Modern systems make it easy to set up automated emails or text messages and remind customers when their rent is due. These notifications prompt tenants to pay before they go into default. Many people also like to receive payment-confirmation messages. All this communication can typically be handled via low-cost email or text platforms, your facility-management software, and your mobile app, if you have one.

The important thing is to let tenants choose the communication methods that work best for them. Obtain the appropriate permissions to reach them via email, text or any other channel. You can find free guides online on how to set up privacy policies. Legal guidance will vary by country and state, so consult with your attorney as you gather customers’ personal information. It’s also important to train your team on how to lawfully and ethically handle tenant data.

A Concerted Approach

If you’re in a position to implement all of these technologies together, you stand to significantly decrease your self-storage delinquency rate. Of course, budget constraints can make that difficult, in which case you’ll need to choose the methods that work best for your situation and plan to upgrade as soon as possible.

Though the above tools require some investment, they have inherent benefits beyond preventing and resolving late rent payment, such as improved customer convenience and experience. Plus, technology evolves quickly, so new features will continue to be unveiled. It’s important to adapt to changes that can help you reduce collections, boost revenue and expand your competitive advantage.

Marie Williams is the marketing content specialist for PTI Security Systems, a global provider of access-control technology solutions for the self-storage industry. Though she’s relatively new to self-storage, she’s enjoying the adventure that comes with learning everything about the industry. To contact her, email [email protected] or connect via LinkedIn.

About the Author(s)

Marie Williams

Marketing Content Specialist, PTI Security Systems

Marie Williams is the marketing content specialist for PTI Security Systems, a global provider of access-control technology solutions for the self-storage industry. Though she’s relatively new to self-storage, she’s enjoying the adventure that comes with learning everything about the industry. To contact her, email [email protected] or connect via LinkedIn.

 

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