I am debating if I should change my anniversary date billing to the first of the month billing. By going to first of the month, I can prorate the move in. This may be more attractive to new customers moving in?

We have always been first of month rather than anniversary, and it sure seems to me that anniversary is a lot of unnecessary hassle. We send out bills on the 23rd of every month, rent is due on the 1st and late on the 11th. We prorate moving in, but do not prorate moving out, you go into a month and you buy the whole month. Notice of move out is due by the 20th of any month, otherwise you forfeit the deposit.

It seems like a huge hassle to be sending out billing, locking people out, adding late fees, taking move-out notices each and every day of the month. With the first of month system I know which exact dates every month things will happen. I can even plan vacations around specific dates if I need to and know that the other days will all be garden variety rental-only days.

If someone moves in before the 15th of the month we take the proration for the rest of that month and the deposit. If they move in after the 15th we take the rest of that month and the full following month (we don't want somebody to pay a 10 day proration and then move out, our policy is a 1 month minimum rental period), plus deposit. Most people are used to the 1st to 1st cycle anyway, with paydays, rents and mortgages, nobody has ever asked for the anniversary style.

Wow Storman looks like we do the same thing. I cant imagine aniversery dates.
That would confuse the crap out of one of the girls around here. Do you prorate rent when they move out? Just curious.

Colleen

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Manager
Mason Mini Storage
Mason Michigan

I agree with the Storman - I personally feel that the 1st works best. I know it means more work for the managers at the end and beginning of each month, but I also know where things stand by the 6th. Also, since the majority of the industry does not send out bills, it is much easier for the cusotmers to remember the 1st as their due date.

On another issue on this topic. Attorney Jeff Greenberger (www.selfstoragelegal.com) has convenienced me to not use the term Anniversity, but the term Renewal Date. He discovered that every reference volume refers to an Anniversity Date as something that happens once a year - not as we have used it in the self storage industry to be a monthly event. So consider getting everyone on your maangement team to use the new term.

MisterJim444

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Learning Never Ends

Nope.
"We prorate moving in, but do not prorate moving out, you go into a month and you buy the whole month." Whether they use it or not.

If it's only a couple of days into a new month and they've given me proper notice, I'll let them go into a new month without paying the full rent and just keep their deposit.

MisterJim- maybe the attorney is trying to tell you not to use the word "anniversity" only because there's no such word

Wow I do the same thing around the 1st of the month. We do bill our client monthly. Except for the automatic credit card payment they get a receipt kicked out.

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Manager
Mason Mini Storage
Mason Michigan

From an operational basis FOM makes perfect sense. From a cash flow analysis it is much easier to know the capital requirements for any given month. However.... from an NOI stand point prorating move ins gives up a lot of capital month after month. If you move in 50 units for an average of $100 per, and waive an average of 10 days due to pro rate, that is approx $1666 in unrealized rent per month, annualized to $19,992. And, at an 8 cap that is $249,990 in asset value.

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Self Storage Management
Storage Career Center

Great point. Looks like the year before I retire and sell everything I'll be switching to renewal date billing.....

I've NEVER moved in 50 units in a month though, only being a 400 unit complex I'm happy with just seeing a net increase in occupancy month to month. The numbers you cited would be far less for me, but for the bigger players that is a significant difference.

Read some interesting comments here we proate move in from day of lease to end of month. Then next month rent due on !st of month there after.

Len

Gee thanks fro all the great advice, I am sorry for not replying sooner, but I have been away. I have asked my manager to switch the billing to FOM. We will give it a go foir the next year and see how things shape up. This last year was a tough one for us. I hope this spurs some help.