Once They Got Me, They Got Me!

Don’t let this happen to you . ..

A few years ago I needed to store a dozen big steel filing cabinets south of Los Angeles.  I rented a 10’ x 10’ space in a building owned by a group that had about a dozen self storage facilities around the West Coast.  The first year was great – all I did was send a check.  They cashed it.  End of story.  The second year, they raised my rent three times! 

The first two times, I was mad but I had to live with it because who wants to drive to LA and move 2,000 pounds of steel over an extra $20 or $30 per month?  The third raise broke this camel’s back.  I drove down to LA and donated the cabinets to St. Anthony’s.  (Incidentally, they were terrific.  St Anthony was the only group willing to come out and pick up the cabinets.  They showed up exactly when they said they would.  I was so delighted, I helped them load the truck.  If you want to make a donation and have them pick up, try www.pickuplease.org.)

A couple of years ago our mother passed away.  She had a lot of stuff but with professional movers I was able to squeeze it all into a 10’ x 20’ storage locker.  I rented from one of the big national storage companies because they had the best price on the web.  After six months they raised our rent by 30%.  I

called and complained:  “I haven’t even been in there a year yet.  How can you raise me so soon?”  The lady in the call center read from her script:  “We have determined that the fair market value for the unit in that area is X + 30% dollars.”  In other words, they felt I would pay it, so they charged it.  The advertised rates on the web page for new tenants did NOT go up.  But what could I do?  It cost $2,500 to move mom’s stuff into that storage locker.  If they raised the rent 100%, I would still need to pay it or give the stuff away.

After mom passed away, my sister and I had to run Wilsonville Self Storage.  So we went to a self storage industry convention to learn more about the business.  On the first day, a panel of executives from the big national chains explained how little storage facilities like ours are so poorly run compared to the nationals.  One example they pushed repeatedly was how the small operators did not aggressively raise rents on existing tenants.  They had experimented on their customers and found that if they try to raise rents on prospective incoming tenants, the prospective tenants lease elsewhere.  But if they raise rents on existing tenants, it is a sufficiently big hassle for many of the tenants that they will stay despite the rent increases.  A few tenants will leave.  Thus, the game for the sophisticated self storage business is to OPTIMIZE income by sticking it to their existing customers just enough that they do not leave in droves.

I knew it already, I suppose, but it was still an eye-opener to hear them say it.  My possessions have never been stolen out of storage, but I feel like I got robbed two times out of two.  That is not the experience we want for our customers.  Are we naïve or incompetent if we don’t rob our customers too?

 

Maybe.  But this is the way we have done business and we do not want to change.  We are leaving a little money on the table to get people in the door and we are leaving a little more money on the table for our long term tenants.  By doing this, and doing the background checks, we seem to have collected a terrific group of tenants, which means fewer bounced checks, less abuse of our facility, and generally less drama for Judi or us to manage. 

We offer our tenants a great value up front and over the long haul.  Hopefully that great value will continue to attract great tenants.