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Rate increases are a fact of life. There are many reasons for them, but few people actually like to deal with them. When it comes time to raise rental rates at your self storage facilities, are you prepared to deliver notice to your tenants? Do you know what messaging is least likely to lead to a barrage of complaints to your self storage managers?
We've got you covered. Check out our Rental Rate Increase Letter template to get started!
Raising your self storage unit rental rates is an important way to generate additional cash flow for your business.
Whether you're using that cash to make improvements to benefit your self storage tenants, need the additional revenue to cover rising expenses, or have any other reasons for raising rates, you're going to need to raise them eventually.
Most of us will expect that tenants will be unhappy. Even a perfect letter of notice won't make everyone happy, but it can help explain your rate increase in a reasonable way. Increases in rent are not a foreign concept—most of your tenants will be familiar with rate increases from other aspects of life such as apartment rent. The important thing is to remind them that this increase is a necessary part of running a business and that you appreciate your relationship with them.
When should you raise your self storage rates?
In general, you should look to raise rates on your most popular storage first. If you're having trouble filling up unit Type A, but unit Type B is constantly booked out, then raising rates on Type B and leaving the less popular units at their current rate is the best path forward.
You don't need to be a wordsmith to know what to say. We've got you covered with our Rental Rate Increase Letter template, part of our Operator Toolkit!
Our Rental Rate Increase Letter template will go a long way to help peacefully raise your self storage rates. That's not all it takes, though.
Here are some additional tips for making the process as smooth as you can.
The damage of any negative news can often be mitigated by setting the right expectations upfront.
What does that mean for your rate increases?
From the moment a tenant is signing their lease, you should be giving them simple and visible information about your rate increase policies. Give them some reassurance about how often they can expect an increase so that they aren't left fearing another hike is around the corner after the first one. Give them some idea about the maximum percentages they could see an increase at. And make sure they see that information. Don't hide it in the fine print or brush over it—call it out, and make them understand it from the start.
Basically, just make sure they know what to expect from the start so they are less likely to be caught unaware and become frustrated.
No one wants to be blindsided by an increased rate on anything, let alone their self storage unit.
How much notice is preferable?
Well, as much notice as possible. If someone is already evaluating their budget for the month ahead, suddenly receiving a notice about an increase on their very next payment coming up could be frustrating and hard to accommodate.
This one is pretty straightforward, but you should stick to your own procedures. You don't want to tell a tenant that they'll receive 60 days' notice of an increase and then give them half of that.
If you use our Rental Rate Increase Letter template, you're probably already going to notice that a key part of the letter is explaining the reasons for the increase to your tenants.
Well, get ready to do it again.
While you should make sure to have an explanation for your rate increase in your notice to the tenants, you should also expect there to be questions, concerns, and complaints. This is a crossroads where you can easily turn a reasonable tenant into a lost tenant. Don't meet these responses with hostility. Instead, try to anticipate questions and concerns, and come up with answers to those responses. This will help you address the tenant's concerns in a more reassuring manner that is likely to defuse the situation.
Ultimately, raising your self storage rates without running off tenants comes down to paying attention to the human element of doing business. Your tenants are people with their own needs and struggles, and respecting them can help lead to them respecting you and your needs as a business.
For more great resources and information, check out the links below!
At StoragePug , we build self storage websites that make it easy for new customers to find you and easy for them to rent from you.
With Insights, our self storage marketing platform, operators get the data and digital tools they need to make the get out of their website and their self storage investment.