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  • Automatic payment .. How many of you require it?

    I am brand new at this, just getting done building my first 48 unit mini storage building. I am thinking about only excepting automatic payment, but I am afraid I will turn away many people by doing this. I would like to hear from people that only except auto payments and their experience if any of you guys are doing this?
    Eli Miller
    http://www.woodsidestorage.rentals

  • #2
    Re: Automatic payment .. How many of you require it?

    well it kinda depends..............hope this don't go to long. we never took cc until just this past year about mid summer. we have three diff. locations and three diff. types of renters, one community is Hispanic, never have asked about paying by cc so we never even thought twice about it. another facility 24 units only small town again nobody had ever asked about cc payments but no deadbeats either. lastly we purchased another facility early 2014 (52 units) in the county seat where we live and found out a few things, 1. people here are more mobile, here today gone tomorrow, 2nd they prefer to pay by cc. so on our web page we have added a paypal link, you can pay by cc or paypal and add the additional fees to them. so over the last 6 months or so we average about 25 or so who pay by cc now and loving every minute I may add.
    so again just my 2 cents it kinda is driven by your clients, if they want it great saves a lot of headaches sometimes. if you want to see how we did it go to www.randrselftstorage.com nothing fancy but it works.

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    • #3
      Re: Automatic payment .. How many of you require it?

      Originally posted by elimiller View Post
      I am brand new at this, just getting done building my first 48 unit mini storage building. I am thinking about only excepting automatic payment, but I am afraid I will turn away many people by doing this. I would like to hear from people that only except auto payments and their experience if any of you guys are doing this?
      My facility opened two weeks ago. Small town, the other facilities do not offer credit card payment. Out of my first three tenants all are on autopay. I offer them no deposit required if they go on autopay. First two preferred credit card and autopay immediately, third one was going to pay check then realized she didn't have her checkbook with her, so decided to do credit card after all.

      I don't have a manager. It's just me, the owner. So I love the idea of not having to worry about tracking down the checks.

      Steve

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      • #4
        Re: Automatic payment .. How many of you require it?

        I just opened a new facility in October. I have 52/127 units rented out and I would estimate that at least 90 percent are using credit cards or automatic checking. I push them in that direction and makes my life much easier. It is definitely easy and the way most people nowadays prefer
        Mitch

        Ironside Self Storage

        www.IronsideSelfStorage.com
        [email protected]
        www.facebook.com/ironsideselfstorage

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        • #5
          Re: Automatic payment .. How many of you require it?

          Originally posted by elimiller View Post
          I am brand new at this, just getting done building my first 48 unit mini storage building. I am thinking about only excepting automatic payment, but I am afraid I will turn away many people by doing this. I would like to hear from people that only except auto payments and their experience if any of you guys are doing this?
          The ones that are most resistant to auto pay are the short term renters, only needing a unit for 3 months or less. And those who are renting and want to keep the fact they have a storage unit a secret....in anticipation of an upcoming domestic breakup for example. They may not want a storage charge showing up on a debit or credit card. Also, the over 60 crowd has a higher percentage of people who prefer checks or cash.

          Anytime you restrict the terms under which you will rent a unit, you will lose a percentage of potential renters. How large a percentage will depend on your demographics in many cases. However, they may be an acceptable loss if the demand in your area exceeds supply of units. If there is too much competition in an area, it may not be wise to stand out as the ones who will only rent to those with a card who agree to go on autopay.

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          • #6
            Re: Automatic payment .. How many of you require it?

            Originally posted by Lisa T View Post
            The ones that are most resistant to auto pay are the short term renters, only needing a unit for 3 months or less. And those who are renting and want to keep the fact they have a storage unit a secret....in anticipation of an upcoming domestic breakup for example. They may not want a storage charge showing up on a debit or credit card. Also, the over 60 crowd has a higher percentage of people who prefer checks or cash.

            Anytime you restrict the terms under which you will rent a unit, you will lose a percentage of potential renters. How large a percentage will depend on your demographics in many cases. However, they may be an acceptable loss if the demand in your area exceeds supply of units. If there is too much competition in an area, it may not be wise to stand out as the ones who will only rent to those with a card who agree to go on autopay.
            Thank you for your input.
            Eli Miller
            http://www.woodsidestorage.rentals

            Comment


            • #7
              Re: Automatic payment .. How many of you require it?

              You could always offer an incentive to do autopay, like $10 off after 6 months or something. It isn't much, but people like to think we're getting a deal. We "sell" our autopay by describing it as a "no late fee guarantee" so they don't have to every worry about forgetting.

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              • #8
                Re: Automatic payment .. How many of you require it?

                We have approximately 600 units/spaces at our facility- I ALWAYS ask for auto-billing as it is easiest for us and also for the customer (as I remind them)! Our former area manager used to give those on auto-billing a 3 percent discount but the new area manager did away with that. We've not had an issue since.... I'd say that close to 1/3 of our tenants are set up for auto-billing.

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                • #9
                  Re: Automatic payment .. How many of you require it?

                  I would tell you we strongly encourage "Auto-Pays". When taking payment at the end of the leasing process, we ask will this be V AMEX DIS or MC. When they hand the card over and make a payment with it, we assume the "sale" and ask "Is this the card you want to use to pay your bill each month." By doing it this way 9 out of 10 will say yes and fill out the paperwork for Auto Pay right away. Since starting this tactic 20 months ago, we have gone from almost nothing to 56% of our overall tenants on auto-pay. We're batting about 80% of new tenants saying yes with the other 20% paying with card via phone in person or web or paying cash or check. Not bad.
                  Last edited by MyStorageOps; 2 February 2015, 04:56 PM.
                  Chasing Perfection to catch Excellence

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                  • #10
                    Re: Automatic payment .. How many of you require it?

                    It depends on your demographic. I have stores that require it, and others that do not. The stores that require it have less delinquency. Also, the stores that require it are higher in occupancy. I would research what your competition is doing. If you are trying to lease up, you may not want to do it. If you are over 85% occupied, then I would implement the policy for new customers.

                    We never give discounts for auto pay because we have to pay the fees. We do not pass those fees onto our customers so we already receive less per unit for auto pay customers. We simply offer a "No Late Fee Guarantee" (Thank you Anne Ballard).

                    You can always try it. You have nothing to lose. If you find you are losing too many rentals, then it may not be for you.
                    Stephanie Tharpe
                    President
                    A+ Management Group, LP
                    Nashville, TN
                    www.aplusmanagementgroup.com
                    615.288.2162

                    TNSSA Board of Directors
                    www.tnssa.net

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                    • #11
                      Re: Automatic payment .. How many of you require it?

                      We don't require auto-pay, but we do highly encourage it. Our property runs consistently in the high 90 percentile of square feet occupied and delinquencies are low. However we do have a wide gap in the socio-economic climate in our area. Some folks diligently come in to pay their rent on the first of the month, not the 2nd or the 3rd and they don't own a credit card or a checking account. You can set your watch by these folks and some have been with us for many, many years. If we required auto-pay we'd lose these great customers.
                      Gina 6k
                      twitter.com/GinaSixKudo
                      VM: Four-Oh-Eight- Seven-Eight-Oh-Eight-Oh-Seven-Nine
                      [email protected]



                      You only live once, but if you do it right, once is enough!
                      I am not an attorney, just an experienced manager who is willing to share what I have learned. Your thoughts, practices or opinions may vary and neither of us may be right.

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                      • #12
                        Re: Automatic payment .. How many of you require it?

                        While autopay may seem nice and easy, there are some downsides as well. One, you get hit with the credit card fees, and yes they do add up, thousands a year. Also, people always forget to update their card info when they get a new card, especially with all the fraud that went on last year, happens all the time and storage is the last one they think about to update. Also short term renters may not want to give you that info, many people just aren't willing to shell out cc info to strangers.

                        Our rule of thumb, whatever is easier for the customer, let them choose, win win.

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                        • #13
                          Re: Automatic payment .. How many of you require it?

                          We started accepting ACH payments about 3 or 4 months ago. The fees are almost non-existent, and checking account numbers don't expire like credit card numbers do. Nor do checking account numbers get lost or stolen.

                          We now accept either ACH or credit card on our website, and we made sure we put ACH first and prominent on the page. I have had very good success in converting those customers who are paying with debit cards on ACH instead.

                          We can also take a check by phone for the same astronomically low fee. Even my older customers who don't have or like cards have been going along with the ACH.

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                          • #14
                            Re: Automatic payment .. How many of you require it?

                            The people that are getting close to a c/c expiration can be a problem but in our system I can print a report that will tell me who's c/c will expire before the next auto pay period. It tells me whether they are auto pay or just have used the card to pay in the office or at home at the web site before. I send them all a generic email to update with me before next rent. Short timers don't want auto pay and people that live paycheck to paycheck don't want auto pay. We try to make it easy and if they get a late fee I remind them that we can make sure that will not happen again if card is auto pay and is good at the time it is charged. The normal excuse is "I forgot."

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                            • #15
                              Re: Automatic payment .. How many of you require it?

                              It's all in the sweet approach.

                              When explaining the benefits of my facility to my customers I nonchalantly and with a SMILE explain we require a driver's license and a major credit card and that their rent will be automatically billed on their due date each month. Then when the lease is printed I just slide the auto bill authorization in front of them....boom! Done.
                              Ashley Dawn
                              Property Manager/Singer-Songwriter
                              [email protected]
                              http://www.aplustorage.com
                              The storage business is FUN!

                              http://facebook.com/AshleyDawnTheArtist
                              http://AshleyDawnTheArtist.com

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