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  • Security Deposit questions

    I just got off the phone with our other facility and they asked my thoughts on starting to charge a security deposit. For those of you that use them; how does it work? If they pay with a card, I know I can refund it back to that. What if they pay it with cash? Keep it separated from other cash to refund when they vacate? We also charge an admin fee now. Do we stop that, or roll it into the deposit. Say my deposit is $100, my admin is $10. They pay $110 at move-in but get refunded $100 when vacated? Do I charge one flat deposit regardless of unit size, or structure according to size. Trash left behind is becoming more of an issue at our other facility, while it's always been a problem here at mine...with certain times of the year worse than others. Any advice and/or suggestions on how best to go about getting it started would be appreciated.
    Too many freaks, not enough circuses.

  • #2
    I would keep the admin fee separate and keep doing the move in as before. There should be a separate section of the move in details that shows a deposit and whatever dollar amount you arrive at. IMO, the deposit should reflect on the size of the unit. The bigger the unit the more deposit because, as you stated, most of the reason for the deposit is the trash left behind and the bigger the unit the more trash there could be. The deposit money, again IMO, should go in to a separate account and only issue refunds as a check. No matter how they paid the deposit it should be tracked with a company check. I would also tell them that the check can be ready at move out if they give acceptable notice and the unit is inspected and found to be ok. I would also tell them that not giving a move out warning will affect the amount of the refund as well as other things you can decide on. The deposit check will be picked up at the facility so their is no chance of it being lost in the mail and believe me, there will be some that get the check and still say it was lost in the mail. If they want it sent via mail they would have to pay for you to send as priority mail, for $6.70 right now, so that there is a tracking number. I am still pushing for a deposit here but as of yet have not been able to talk the owner in to it.

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    • #3
      You gave me several things to think about, especially the deposit refund based on whether or not a tenant gives me notice.
      I'm also wondering how/if it will affect whether or not someone decides to rent here. Obviously, it will weed out "undesirable" tenants; homeless, those looking for a place to dump their trash, the 'about to be evicted and I need the smallest/cheapest unit you have today' folks. I'm sure there are many discussions in my future on how to get this started.
      Too many freaks, not enough circuses.

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      • #4
        When I took over here there were some of the undesirable tenants here and they caused drama and problems with other tenants and paid late all the time and gave no notice and moved out owing rent. The owner said to "run it like you own it". I got them gone and was picky in who I rented to and then filled the facility and have stayed above 95% since then and the facility is lit up and secure and cameras and the tenants are just better all around. It depends on what you want to attract.

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        • #5
          We charge a $20 Admin fee that is non refundable. Most folks dont mind paying it, some will ask what it is for. I just tell them its to cover several costs- like the carbon copy paperwork (its not as cheap as you would think). I'v lost a few rentals for some who thought that was too expensive- but in my mind if they balked at that they probably would balk at paying a late fee, or following rules too. So, not sad to see them leave.
          You Laugh, I laugh. You cry, I cry. You take my coffee...may God have mercy on your soul....

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          • #6
            I charge a $10 non-refundable admin fee. I just wasn't sure if I should continue it or not if I instate a deposit.
            Too many freaks, not enough circuses.

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            • #7
              Keep the admin fee and if you don't want to charge a refundable deposit then up the non-refundable admin fee.

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              • #8
                Originally posted by wc1974 View Post
                We charge a $20 Admin fee that is non refundable. Most folks dont mind paying it, some will ask what it is for. I just tell them its to cover several costs- like the carbon copy paperwork (its not as cheap as you would think). I'v lost a few rentals for some who thought that was too expensive- but in my mind if they balked at that they probably would balk at paying a late fee, or following rules too. So, not sad to see them leave.
                Yep, people that balk at an admin fee that almost every facility charges, will likely be bad tenants. If you did not charge an admin fee then they would be the first to say you should send invoices and mail notices and do this and do that.

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                • #9
                  I charge no admin fee and make a point of that in my pitch to potential customers, it's a big selling point. I do keep a fully refundable $15 or $30 deposit based on the size of the unit. I refund the deposit if the unit is left clean, undamaged AND the customer gives me the requisite 10 day notice prior to the end of the month. (I prorate on move in only, not move out). No matter how they pay me initially, I refund by mailing them a check, or in some cases I'll write them a check at the counter if I have the time to inspect the unit.

                  The deposit amounts have already been assigned in my software to each unit, so it knows how much to charge on move-in, but it's really easy for us, if it's a 5' wide unit the deposit is $15, and if it's a 10' wide unit the deposit is $30. Upon move out the software reminds me to send a check to the former tenant in the amount of the deposit, or prompts me to choose why the refund is not being returned (damage, debris or lack of notice).

                  I've posted this before, but the BEST thing about a fully refundable deposit is that almost everybody forgets they paid it on move in, so when I remind them that there is a deposit coming back to them I'm a hero. People leave happy with a positive interaction as my last touch with them. Also, when they're drunk with glee that they're getting some of their own money back, it makes it extremely easy for me to ask them to post an internet review of my business.





                  In no way affiliated with Storman software.

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                  • #10
                    My first question would be - do other properties in your area charge a deposit? If not, that could cause a lot of customers to go elsewhere to avoid the extra charge at move-in. If I tried to charge a deposit, I'd lose a lot of business because no one else charges it.

                    Beyond that, I'd still charge the Admin fee (for the start-up paperwork) in addition to the deposit (in case of damage, etc). They have 2 different functions.

                    And your software should allow and account for both of these fees, making it easy to see what refund is due at move out.
                    MamaDuke

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                    • #11
                      Originally posted by MamaDuke View Post
                      My first question would be - do other properties in your area charge a deposit? If not, that could cause a lot of customers to go elsewhere to avoid the extra charge at move-in. If I tried to charge a deposit, I'd lose a lot of business because no one else charges it.

                      Beyond that, I'd still charge the Admin fee (for the start-up paperwork) in addition to the deposit (in case of damage, etc). They have 2 different functions.

                      And your software should allow and account for both of these fees, making it easy to see what refund is due at move out.
                      I'll need to do a little research on the other facilities about deposits.
                      Too many freaks, not enough circuses.

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                      • #12
                        I'd raise your admin fee and not do a deposit-depending on area facilities.
                        "The comeback is always stronger than the setback."
                        Mom, Navy Vet, genealogist and voracious reader
                        Always sunny in California

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                        • #13
                          Originally posted by MamaDuke View Post
                          My first question would be - do other properties in your area charge a deposit? If not, that could cause a lot of customers to go elsewhere to avoid the extra charge at move-in. If I tried to charge a deposit, I'd lose a lot of business because no one else charges it.
                          By the same token, if you stopped charging a non-refundable admin fee and only kept a fully-refundable security deposit, think how much more business you'd get in your area. I have firsthand experience with this.... Do the math, if you charged 5 new move-ins a month a $20 admin fee, that's $100 in one time additional income. If you rented 1 or maybe 2 more units a month because you didn't charge the admin fee, that's likely well over ~$200 per month, for as long as the customer stays with you (in my case, my average length of stay is over 4 years, so ~$4800) I'll gladly use the admin fee as a club to beat over the heads of my competitors, come to me and you'll pay what I quoted you, nothing more.

                          I don't want to hijack the thread here, but administration fees are looked at by the consumer as a blatant money grab. I personally wouldn't do business with a store that charged me an admin fee to buy their products, either sell it to me at the price advertised or I'll find someone who will. I assume those charging admin fees are thrilled when they book a competitive hotel room only to find a 'resort fee' added on at the last minute? Woohoo!
                          In no way affiliated with Storman software.

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                          • #14
                            My admin fee includes the German made disc lock and they keep the lock when they leave. It is $18. I quote all rents and tell them about the one time admin fee. The ball is in their court at that time, whether to rent here or not.

                            But what I continue to notice is that the biggest driving force, at least in my area, is the location of the facility and the second driving force, especially in this day and age of out of bounds drug use and homeless, is security.

                            Since I am not charging an admin fee and they get nothing for it, I feel it is a value. If I could I would still do the refundable deposit. I am way pickier about who I rent to, than most managers. We all have different opinions but I have said many times to someone that if they are looking for the cheapest price and expect the clean/well lit/secure/close by facility, well that does not go hand in hand.

                            I can brag about security here and the police will tell anyone that calls them that I have never had a break in here. I encourage the tenant to do that and some have and they told me they found out I was telling them the truth.

                            I see a slow down in the industry, except for a few pockets across the U.S. IMO, price is not going to be the biggest thing that sells a facility, I think security will be. Homeless problems will get bigger and worse. More states are passing legal drug laws. More entitlement trained students graduate every year. Hell in a handbasket comes to mind.

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                            • #15
                              Agreed Pac, 32 yrs. and not a single break in here either. I don't rent to everybody that comes to my office, I become VERY expensive or magically full in the blink of an eye. I also make sure that all you're doing is storing your stuff here, nothing else. I had a customer come to me yesterday and rent a 2nd unit for some inventory he needs kept secure, his exact words were "I thought about storing closer to my job, but I realized that every. single. time. I come to my unit here I've never seen another person on the whole facility. If I didn't know better, I'd think all these locks were fake and I was the only one paying rent"

                              That's because I only rent to people that are storing stuff, not base camp for nefarious operations.
                              In no way affiliated with Storman software.

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