Full Occupancy - Good or Bad?

[fishhu1968]

I currently have 3% that is not at street rate which includes a few prepay specials that we offer. I'll be doing another rate increase in the Fall for those.

[fishhu1968]

Another question I'd like to pose to everyone, does your delinquency affect your decision to raise rates? Over the last year, I've had more and more tenants go into auction status. My end of the month goal is 4-5% which I'm barely hitting now. I have monthly auction listings where I use to only have 4 or 5 auctions a year. So delinquency is definitely up. Would this be a factor in raising rates?

[AngelaESSTX]

Are all of your current tenants at street rate? 52% of mine are now below street rate after last week's rate increase. So I will send out 286 rent increases tomorrow at $10 per tenant. As long as fewer than 30 move out, I will be making the same $ and have some available units for spring season. I will be surprised if more than 10 move out. We shall see...

This is a factor here. I don't have the percentages, but we have a ton below street rate. We finally did a street rate increase last year after not having done one in about 10 years. After that, we did our first tenant increase in 7 years (only 5% increase). I have a lot of tenants still ranging from $10-$60 below street rate. I pushed the rate increase again this month since it's been 12 months since the last. I processed over 300. So we would not benefit from being full, at this time, due to most tenants being well below what we could get from a new renter. I've had some move outs since this last increase (5%) most of them are long time tenants that never had an increase in their 15 years here (the previous manager would process them, then go back and reverse it because she was a softy) and are shocked their $10X15 climate unit is now $188 vs $179 when the street rate is $215

[helenatim]

This is a factor here. I don't have the percentages, but we have a ton below street rate. We finally did a street rate increase last year after not having done one in about 10 years. After that, we did our first tenant increase in 7 years (only 5% increase). I have a lot of tenants still ranging from $10-$60 below street rate. I pushed the rate increase again this month since it's been 12 months since the last. I processed over 300. So we would not benefit from being full, at this time, due to most tenants being well below what we could get from a new renter. I've had some move outs since this last increase (5%) most of them are long time tenants that never had an increase in their 15 years here (the previous manager would process them, then go back and reverse it because she was a softy) and are shocked their $10X15 climate unit is now $188 vs $179 when the street rate is $215

Are your market rates comparable to your competitors? If you bring your current tenants to market rate will they be able to go anywhere for less money? Probably not. So, you will get a few whines and moans. But most are aware that storage units, like gas and eggs and concert tickets and flights, have all gone up. And nobody wants to move their stuff. They are too busy and too lazy to do it. So, be fearless and bring them all to market rate!

As rates started to really climb in the last three years, I realized how much harder it is to make those big jumps when tenants are far behind on street rates. I have found that a $5-10 increase yearly causes minimal tenant move out and very few complaints even.

[helenatim]

Another question I'd like to pose to everyone, does your delinquency affect your decision to raise rates? Over the last year, I've had more and more tenants go into auction status. My end of the month goal is 4-5% which I'm barely hitting now. I have monthly auction listings where I use to only have 4 or 5 auctions a year. So delinquency is definitely up. Would this be a factor in raising rates?

My theory is higher rates lead to fewer delinquencies. You want the best quality tenants and they will probably pay the higher prices. We are at less than 1% delinquency and have had 7 auctions this year. Get everyone on autopay and if they cant pay by credit card, let them go elsewhere. Also this year I have increased methods of getting after tenants who are late. Automated texting and early threats of auction are really helping. If you can catch them while they are only a month late, that's a lot easier than owing for 3 months. A lot of tenants think that their storage bill is the lowest priority. Let them know that it isn't.

[Clarkstoragellc]

Another question I'd like to pose to everyone, does your delinquency affect your decision to raise rates? Over the last year, I've had more and more tenants go into auction status. My end of the month goal is 4-5% which I'm barely hitting now. I have monthly auction listings where I use to only have 4 or 5 auctions a year. So delinquency is definitely up. Would this be a factor in raising rates?

What are your terms?
Autopay or checks/cash? Autopay reduces delinquency from two standpoints. This is like a background check, if they don't have a bank account or Dr/Cr card, you don't rent to them. Send them to your competitors. Gets rid of check is in the mail so you lock out quicker.

How fast do you lock out? The better stuff in there, the more you will be paid.

Delinquency fees- I say get rid of them. Increase the rate on anyone who is habitually late, especially if you have high occupancy. You don't want to know any of your customers based on bad payment history. Get rid of them.

Out of 850 rental units, we only had to auction 2 of them last week. This is over a 2 month period. We started off with about 12 past due, up for auction. The ones we didn't auction, we raised their rental rates. The "Payment Quality" of your customer gets better and better.

[AngelaESSTX]

Are your market rates comparable to your competitors? If you bring your current tenants to market rate will they be able to go anywhere for less money? Probably not. So, you will get a few whines and moans. But most are aware that storage units, like gas and eggs and concert tickets and flights, have all gone up. And nobody wants to move their stuff. They are too busy and too lazy to do it. So, be fearless and bring them all to market rate!

As rates started to really climb in the last three years, I realized how much harder it is to make those big jumps when tenants are far behind on street rates. I have found that a $5-10 increase yearly causes minimal tenant move out and very few complaints even.

Our street rates are comparable to most of our competitors. The past 2 years we've had 2 new companies open in our area and we are still doing well. Those 2 are priced pretty low for rent-up purposes. I've had a few people actually move out, but again, they were so far below street rates and we're getting new tenants in their units and bringing in more. We only increase 5% at a time so it's only a few bucks so anywhere from $4-$20 yearly. I have a large amount of tenants who have acknowledged this increase and are very ok with it, no complaints and completely understanding...They've been here 15 years and only had 2 increases.

[KrisinCali]

Our street rates are comparable to most of our competitors. The past 2 years we've had 2 new companies open in our area and we are still doing well. Those 2 are priced pretty low for rent-up purposes. I've had a few people actually move out, but again, they were so far below street rates and we're getting new tenants in their units and bringing in more. We only increase 5% at a time so it's only a few bucks so anywhere from $4-$20 yearly. I have a large amount of tenants who have acknowledged this increase and are very ok with it, no complaints and completely understanding...They've been here 15 years and only had 2 increases.

15!!! years and only 2!!! increases! Dang. I know ~you~ know this, but money left on the table.

[AngelaESSTX]

15!!! years and only 2!!! increases! Dang. I know ~you~ know this, but money left on the table.

Oh for sure! I took over this store in 2018 and got around to asking if we could do one in 2019, then covid hit so it got delayed. I asked again end of 2021 so we updated street rates in February and tenant rates in March 2022. It's now time for the 2nd one, which I scheduled for April. I can see when certain tenants did have one a very long time ago from their notes, but the pervious manager would change it or dismiss it. Most would say they weren't aware/didn't get the notice (mailed & emailed) and she would let them slide. Some tried it with me and I confirmed their info was correct and I politely advised they had X amount of days to pay the remainder so they don't get the late fee, they didn't give anymore pushback from there.

[helenatim]

One week after rent increase notice, have received one email from a tenant who is moving out and is unhappy, but also understands it's just business. I probably wont solicit him for a google review after move-out. I'm sure there will be a few more before the May 1 increase kicks in, but pretty quiet so far...

[Mistore]

I have found that 95% is about my sweet spot. My unit mix is really well balanced with my demand; as I go above 95% I start to have availability issues with certain sizes, and as I go below I tend to start to build up vacancies on certain sizes. What sizes are available/needed really varies, right now I have multiples of 10x10's and strong rentals on all other sizes.