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  • Pick Your Payment Date and Moving Truck

    Hello all,

    It's been awhile since I posted! Business has been doing good. I've been at 100% occupancy for most of this year. I had a big box corporate store move into my town so I've been hesitant to purchase another property and expand. All I do currently is climate controlled storage in converted buildings. They are taking an old K-Mart and converting it. I personally don't think we have the demographics to support the number of units I heard they were building, but all I know is that I'm at 100% and I still have people calling
    needing units. So I'm taking the chance and purchasing another property to compete against the big guy...

    I've had 2 ideas I've been thinking about to offer that they don't. They offer a free month of unit rental with a truck rental. I've been throwing around the idea of buying a box truck and offering free use of the truck with a rental of a medium to large size unit. I've done a search and looked at what other members were doing. If you guys don't mind sharing, what is the average cost of insurance you are paying for a tenant to use the truck? Another facility owner told me it was going to cost him like $14,000/year and I just couldn't believe that. So what are you guys roughly paying to insure a truck for the tenants and obviously the liability it brings your facility? I did see the idea of driving the truck to them, parking it, and coming and getting it. That may not be such a bad idea. I also love the idea of having a drivable billboard. You guys may call me crazy but I currently have a 40+ unit facility I'm 100% occupied in and I'm converting the new facility which will have approximately 70-90 units depending on sizes. (I'm converting in phases). I know some users on here have a truck but they have multiple facilities and hundreds of units. I'll have roughly 110-130 climate controlled when I'm completely built out. Do you think this offer is too much for such low number of units?

    The other idea I've been throwing around is the "Pick Your Payment Date". I currently bill on the 1st of the month. I know some facilities bill on the anniversary or move-in date of the month. In my opinion, the "Pick Your Payment Date" is not much different than the anniversary date option. Today is the 12th, if somebody moved in today and they wanted their payment due on the 15th of the month they would owe for 3 days and their next full-month payment would be on the 15th and fall on that date every month afterwards.

    Does anybody here do this? If so, pros or cons?

    Thanks for the ideas and help!

    Okie_Pilot

  • #2
    On a move in you just laid out are you saying that they would only pay for 3 days on the move in and that is it? They could pick a date, like you said, but I would charge another month on top of the 3 pro rated days. Here we are due on the 1st but if they move in on the 1st thru the 9th they pay the pro rate and then next rent is due on the following month on the 1st. If they move in on the 10th or after they pay the pro rate plus one full month.

    When you say climate controlled are you talking true climate control? Heated, a/c and humidity control. We offer what we call temp control inside one building that is heated only.
    "Never let the inmates run the asylum!"

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    • #3
      Even for our 'free' truck on move-in we charge $15. for the reservation/insurance fee. (rounds up to $16.50 with tax). Every time the trucks rolls out that fee has to be paid first. Current tenants can rent it for $19.95, plus the above fee and .79 per mile. Jan-Aug we made $2800 renting out the truck. Not a bunch.
      Even duct-tape can't fix stupid. But it can muffle the noises.

      WA State

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      • #4
        Originally posted by pacnwstorage View Post
        On a move in you just laid out are you saying that they would only pay for 3 days on the move in and that is it? They could pick a date, like you said, but I would charge another month on top of the 3 pro rated days. Here we are due on the 1st but if they move in on the 1st thru the 9th they pay the pro rate and then next rent is due on the following month on the 1st. If they move in on the 10th or after they pay the pro rate plus one full month.

        When you say climate controlled are you talking true climate control? Heated, a/c and humidity control. We offer what we call temp control inside one building that is heated only.
        They would have a payment due again on the 15th. Maybe that was a bad example because there’s only three days difference. It’s no different than prorating. If they moved in on the 2nd and they wanted their payments due on the 20th of the month, I’m not gonna make them pay for 18 days plus another full month at one time. They would just pay from the 2nd to the 20th on the move-in.

        My units are heated and cooled. With all due respect I don’t want to get into the legal debate about what the lawyers consider “climate controlled”. It doesn’t rain, snow, sleet, or hail inside of my building, and I control the temperature. If I wanted it to rain I would turn on the sprinklers. The air conditioners remove a large percentage of the humidity. I consider this climate controlled. If I provided strict humidity control to a certain percentage then I would advertise that. Most people would argue that their houses are climate controlled. My building is no different. That’s just my opinion though.

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        • #5
          No legal debate. Just wanted to know what is offered.
          "Never let the inmates run the asylum!"

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          • #6
            Okie,

            Nice to see your post, hope you continue to contribute!

            As for your question, we bill everyone on the 1st of the month.
            There are a couple of exceptions:
            -one tenant rents for 1 month every quarter and then moves out. She doesn't overstay her 30 days so I let her
            - The other is a company that cleans out foreclosed properties. They need to be able to show 90 days of storage for the evicted people's items. So I bill them on their anniversary date.

            I have had a few people say that due to paycheck frequency, federal/state assistance, alimony, etc that they can't pay on the first. I remind them that they have until the 10th to pay and can always pay early. That works out to over half the month (10 days early, 10 days late) to pay their bill... they should be able to work that out!

            Matt

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            • #7
              We do not. We are FOM billing. We do prorate move-ins (we figure the admin fee into the amount) so if they move in the last day of the month, they have to pay again on the first. Some opt to go ahead and pay it while they're renting but it is not required. We're also month-to-month, but do not prorate out. We do not charge a late fee until the 8th so our tenants who receive disability etc. are able to pay before the fee hits. We used to have a company truck for tenants to use but it got very costly. We then switched to Uhaul, but we dropped that contract at this location 2 years ago due to low rentals and issues with the AFM in our area.

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              • #8
                So the Big Bad Orange Slice(s) - I loved that old logo - has moved into town. Move forward with the expansion in phases, you will be able to beat them on price and service. They are so restricted and have to meet this goal or that goal - you will be able to do what you want, in regards to pricing, discounts, deals to get move-ins.

                I would not put the money into buying a truck and the headaches that follow - they offer the free month at one of their facilities with truck rental. I can't remember if this applies to one-way or in-town or both? What I would offer, we used to do this before we allied with the orange, if a tenant moves in and used a rented truck - give them the base rate (no mileage, no insurance, no fuel) back in cash. You could apply this as a future rental credit, so no money leaves the till and it might help with accounting. You could still offer a unit deal, 50% off the first two months or something like that. Then you do not have to worry about paying for a truck, storing it and hoping it does not get stolen or damaged in a freak storm.

                You will have a tough time going head to head and offer the exact same - since they make so much on the truck with fee's, insurance (they self insure - so that is 100% profit to them). The free month to them is the cost of doing business and they know (as we all do) that once people move into self storage that many just stay.

                I would not offer pick a due date since you may have some people that only want to rent for a few days or a week and will pick their due date accordingly. You will expend the effort at the move-in and collect very little from them.

                Hopefully the local government did not give them too many incentives. I would advertise that you are local, that the money stays local, etc.

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                • #9
                  My company has their own truck at each one of their facilities. The most expensive thing we have to do with our trucks usually is take them to get gas because the tenant didn't fill it back up. That said, I would recommend you buy new rather than used. Saves trouble down the road. (Pardon the pun) We get a lot of interest in our specifically because we use a gasoline truck, rather than a diesel. It brings in a decent amount each month.

                  As to allowing people to pick their due date, I'd avoid that. That can lead to a lot of legal issues down the line. We do Calendar rentals. The day you rent is your due date

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                  • #10
                    Pick your moving date seems that it would cause too much headache over the value you will he delivering to your customers. A Free Move-In truck is one of our best amenities. However, that’s a large expense to swallow for so few units. Our insurance on our truck is about $2500/year and that is the major expense. Our truck is free outside of the tenant filling it back up with gas. The receive their $50 deposit back when it is returned full of gas. I have bought many used trucks from Budget, Penske and Enterprise and had no major issues. If you have a good CPA, ask them about Section 129 of the new tax code. You should be able to write off 100% if the purchase of the used vehicle. Finally, we used to only offer the free truck on rentals of a 10x10 or larger. I have removed that caveat. Sometimes you have a person renting a 5x5 that has items that won’t fit in their car. Let them use the truck for a half day. In my opinion, if you’re paying to have your moving billboard wrapped ($4-5k), then it’s better to have it out on the road as much as possible.

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                    • #11
                      Pick your date seems like a lease nightmare. What language would have to be in the lease to support that? If every single person is on a different date an changing dates, that's a ton of paperwork, locking, unlocking, charging late fees, etc etc. Not worth it in my opinion. If it anit broke, don't fix it. You are 100%, be proud of it. Competition isn't always bad. It can bring more people into the area needing storage. You will find ways to offer a customer something the big guy can't.

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