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Long Term vs. Short Term Storage

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  • Long Term vs. Short Term Storage

    Hey all. I'm writing an article for the Store Local blog on long term versus short term storage. The main focus of the article is this: Should a facility focus more on gaining long term, or short term customers, and why?

    What would you advise a new self storage facility, or one looking into improving its practices?

    Thanks in advance! Everyone here has been really helpful on my other questions and I greatly appreciate it.

  • #2
    Rent on a month to month basis. Take it all, if they stay for only 1 month that will be short term, if they stay 1 year that will be long term. They will determine their stay.
    Dave (Woodee) Scott

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    • #3
      Thank you, Dave! I have a follow up question.

      I know that month-to-month rent is standard. Why is that? Do any facilities lease units for longer periods of time? If not, why not?

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      • #4
        We rent by the month, but give a discount to long-term tenants. The premise is that even if the customer is a short term tenant, if you really do your job, they will come back at many points in their lives and be confident with their choice.They will also give you the recognition you deserve and refer people to your facility. I know this works. 60% of my move ins over the last 6 months were repeat customers!

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        • #5
          Maybe we are different, but most of the people that rent here indicate that they only need it for a month. 6 months later, and most of them are still here. We do everything month-to-month and never run specials, and stay full. My area is growing very fast though so we are able to get away with doing that.

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          • #6
            Long-term is good BUT it can also lock in that monthly rate for the term of the lease.

            Month to month is best, IMHO.
            Don't put off until tomorrow, what you can do today.

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            • #7
              Originally posted by jonfesmire View Post
              Thank you, Dave! I have a follow up question.

              I know that month-to-month rent is standard. Why is that? Do any facilities lease units for longer periods of time? If not, why not?
              Well you could rent for a year, maybe give a discount. We do not refund rent. If we rent for 1 month and the person moves out after 2 weeks there is no refund. Same would go for a person that rents for 1 year. Storage is considered short term by most. We have some people that rent on a month to month basis and have been there for years. Example one at one of our places has been there sense 1993. Jon I guess it is just the nature of the business.
              Dave (Woodee) Scott

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              • #8
                Originally posted by lady5563 View Post
                Long-term is good BUT it can also lock in that monthly rate for the term of the lease.

                Month to month is best, IMHO.
                Doesn't your lease allow for a rental increase? While we typically don't raise rents after a certain period of time, our lease allows for it since it's a month to month lease.

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                • #9
                  Thanks, everyone! You've given me a lot of great information to work with.

                  The article should be up on the StoreLocal blog within a couple of weeks, here:

                  https://storelocal.com/storelocal-blog/

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                  • #10
                    Originally posted by letsgosonics View Post

                    Doesn't your lease allow for a rental increase? While we typically don't raise rents after a certain period of time, our lease allows for it since it's a month to month lease.
                    Yes, it does but at the same time if a customer wants a long-term lease they are more than likely looking for a rate to be locked in for a certain amount of time.
                    Don't put off until tomorrow, what you can do today.

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                    • #11
                      We rent storage units for any terms less than 12 months. I offer their second month for free is they can sign on for 6+months. I do not rent for anything over 12 months, because I want to increase their rents on a yearly basis, and I see not other benefit to signing a multi year deal.

                      I'm not certain that my setup is optimal, it's just what I do.

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                      • #12
                        Personally I think you need to have a mix of both. It's not all about having one or the other. But of course in the interest of expanding your business, you want to have more long term customers so that you can better manage your cash flow of the storage business. Short term rentals are great for higher margins when you rent out to these folk too though and they help to ensure that there are some vacancies available for when those long term renters come knocking! Hope this helps!
                        Edward Thirlwall
                        http://supercheapselfstorage.com.au/.../self-storage/

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                        • #13
                          Originally posted by EdwardThirlwall View Post
                          Personally I think you need to have a mix of both. It's not all about having one or the other. But of course in the interest of expanding your business, you want to have more long term customers so that you can better manage your cash flow of the storage business. Short term rentals are great for higher margins when you rent out to these folk too though and they help to ensure that there are some vacancies available for when those long term renters come knocking! Hope this helps!
                          I agree-beside you get personal recommendations from the long term tenants because they've been happy with you. Last facility we had several tenants that had been there for over 30 years. (crazy!)
                          I want buns of steel.
                          I also want buns of cinnamon.

                          Newcastle, WA

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                          • #14
                            Originally posted by KrisinNC View Post

                            I agree-beside you get personal recommendations from the long term tenants because they've been happy with you. Last facility we had several tenants that had been there for over 30 years. (crazy!)
                            Over 30 Years! WOW
                            Mango Technologies, is your in-house I.T. department, outsourced! We manage how your information technology affects your budget and workflow, so you can focus on your business. We focus on the self-storage industry!

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                            • #15
                              Our Average occupied length of tenancy is 51.5 months
                              Our average length of former tenancy is 23.3 months.

                              I guess they are all Long term.
                              Joe Krezdorn
                              DAK Self Storage
                              Leesport, PA 19533
                              www.dakselfstorage.com

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