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Understanding Self Storage Reservations vs. Rentals

June 22, 2022

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5 min

Most self storage software can handle both reservations and rentals.

But what’s the point of a reservation? How does it differ from a rental, and how do operators use each of the functions? Why would you accept a reservation instead of just waiting for someone to rent sooner?

We’ve got some advice based on what we’re seeing in the self storage industry.

 

 

The Difference Between a Self Storage Reservation and Rental

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For the most part, you can probably already understand what the technical differences are between reservations and rentals.

Some people use the terms interchangeably, but at a technical level, there is a key difference. Reservations are made in advance of a move-in date, allowing you to hold a storage unit for a customer. Rentals are immediate, with the completion of the rental process meaning that a tenant has paid, signed their lease, and moved in.

In a rental, the storage unit isn’t being held—it’s now occupied and paid for.

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Ways to Use Your Self Storage Software’s Reservation Features

These days, many facilities are seeing uncharacteristically high occupancy.

With markets where renting out your storage units is easier than ever, why would you ever opt to make use of the reservation feature—which keeps you from immediately renting out a unit to another customer—instead of just waiting on a rental that is likely to come sooner?

Let’s explore some ways that operators are using reservations!

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Building Occupancy Before Your Open Date

If you have a new facility, it’s a good idea to get your website online as soon as possible to start building authority on the web and to get your name out there.

Since the website is online anyway, it’s also a great idea to include a reservations form so that you can start building your occupancy ahead of time!

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By allowing customers to reserve their units before you open, you mitigate some of the costs of opening the new facility.

This is a useful way to use your self storage software’s reservation functions for both brand new self storage businesses and for established businesses opening new facilities.

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Using Self Storage Reservations to Keep Out Unwanted Tenants

If you’re already an established self storage facility in a market where it’s easy to keep your occupancy high, there’s still a use for your self storage reservations.

You can use reservations to vet your customers.

There are loads of reasons you might want to do this. 

Some operators prefer to meet their customers ahead of a lease being signed so they can judge whether or not they want to do business with the individual.

Other operators have ex-tenants that they’ve put on a no-rent list. Having new customers go through a self storage unit reservation phase—instead of just allowing them to instantly rent—gives the operators or managers a chance to determine if this is an ex-tenant they don’t want to rent to.

The way this process looks on the self storage software side is simple:

  1. On your website, set it up as a rental to avoid confusion.
  2. Once a unit is chosen and the reservation form is filled out, they enter your system as a reservation.
  3. You or your managers can now take time to reach out to the customer or check your records.
  4. Once they’re vetted, you can approve or deny them as needed and finalize the actual rental!

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Securing Occupancy in Difficult Markets

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Though the self storage industry is doing well in general, there’s always the chance that your market isn’t so straightforward.

You could be in an area where there is less demand for self storage, or you might face tough competition.

In these cases, it’s common for operators to hold on to every chance to increase their occupancy.

Self storage reservations allow you to do just that.

If you have storage units that sit empty for weeks or months, then it just makes sense to allow reservations. After all, you may not be able to fill that unit for a few weeks, now, but it likely wasn’t going to be filled any sooner anyway!

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Other Reasons to Utilize Self Storage Reservations

There are a few other ways operators commonly use self storage reservations depending on their motivations.

First, some operators simply want to secure a future rental via reservations rather than gambling or worrying about finding an immediate rental sooner. This provides some peace of mind for operators that are less concerned about squeezing out every penny

Another reason operators sometimes offer reservations—even in markets where it’s not difficult to increase occupancy—is to help out their customers and community members. Maybe they are in markets where it’s harder for customers to find the right storage unit, and the operator allows a reservation to be helpful.

Finally, reservations are often utilized when working with third-party companies that send new leads to facilities. There are a variety of business models for these kinds of companies, from bid models to straightforward aggregators, and generally, they are less cost-effective than refining your own online presence. That said, in these cases, there is often a reservation made on the customer’s behalf rather than a completed rental.

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Depending on your market and personal motivations, your facility may get very little use out of self storage reservations.

However, there are reasons to use reservations in addition to (or even instead of) direct rentals. Whether or not your facility should make use of reservations is entirely up to you and your market!


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