Here’s a basic question you may have considered. Should your storage facility focus on long term or short term renters? Of course, you’ll rent to people seeking either, but should your advertising efforts be focused on getting in people who intend to stay long term, or those who only need a storage unit for a couple of months?
The advantage to having long term tenants is obvious: more units that are consistently filled and that you don’t have to attempt to fill. However, there’s more to this than just the amount of time a tenant rents a unit for. We’ll look at financial factors as well as the psychology of many self storage tenants.
First, let’s consider why tenants seek short term or long term storage.
Customers often have one of these reasons for seeking short term storage.
They are moving and need a staging ground for their belongings during the process.
They are going home for the summer from college.
They have inherited the estate of a relative and need somewhere to put the items so they’ll have a couple of months to sort through everything.
Here are some common reasons customers seek long term storage.
Their new home won’t comfortably fit all their belongings and they need a place to keep clutter and seasonal items.
They need to store specific types of items that might be inconvenient to store at home. This can include things like personal or business records or a large wine collection.
They run a business and have a lot of inventory.
In all these cases, the rental price per square foot of a storage unit is less than the square foot price for a domicile, even if that unit has climate control.
As a facility, you can charge every tenant on a month to month basis or have longer leases for customers who know they want to rent for a longer period of time.
For your monthly renters, you can periodically raise the rent, so long as you do so lawfully. Longer term lessees should have their monthly rate fixed for the term of the lease, which will generally be either six months or one year. The monthly rate for these lessees should also be a little less than for month to month renters. So, they save a little money, while your facility has guaranteed income for their units during the period of their leases.
If a monthly renter pays for one month, and leaves after two weeks, they don’t get their money back. If a longer term renter leaves, say, three months into a six month lease, they still have to pay the remaining three months. This needs to be made clear up front.
This still doesn’t answer if you should put your focus on advertising to short term or long term renters. Here’s our suggestion.
Focus on neither, but when someone comes in to rent, let them know if you offer longer leases as well as month to month.
Yes, with a longer lease, customers can save money, and you’ll have a guaranteed income on their units. However, many short term tenants end up becoming long term tenants. They may see the advantages of having a storage unit and decide to keep it for a while. They may also get busy and not get back to their unit for a while, or they may keep putting off moving out.
Keep doing your job and providing them with great, friendly service at a clean, safe facility, and even those tenants who rent for only a couple of months are likely to recommend your facility to others, or to rent again when they need storage in the future.
Basically, keep your focus on attracting customers, let them know their options, and provide great service. You’ll have short term renters, long term renters, repeat customers, and word of mouth advertising.