Every self-storage owner faces late payments at some time. When the economy struggles like it has for the past 4 years, eventually every industry feels the pinch at some point. There are innovative strategies to put in place at any self-storage to keep delinquent payments to a minimum and avoid the lien process and auction sales that no owner ever wants to go through. These are helpful and effective steps to prevent delinquent payments.
- Clear communication in the leasing process.
- Flexible and customized payment options.
- Automated payment collection.
- Multiple forms of communication.
- Quicklinks for payment.
Clear communication in the leasing process.
When a new tenant is identified and ready to lease, it is essential to communicate the payment process and late fees upfront. Clear and direct communication of the late fees applied when rent is delinquent enables the owner to feel confident in applying late fees when necessary. If an owner decides to offer fee waivers from time to time, this needs to be clearly stated in the lease agreement and kept track of in the payment portal to avoid confusion. Additionally, the owner can limit the number of fee waivers issued to a specific number. Once that number is met, there are no more fee waivers.
Communication is valuable for both parties. The owner and tenant understand the agreement upfront.
Flexible and customized payment options.
Flexible and customized payment options are necessary and helpful for most clients. Rather than having a one-size-fits-all payment option of the 1st or 15th, consider offering options that can be selected to fall on the tenant’s paydays. If tenants choose this option, they are signing up for automated payments that will be billed on the date of their choosing. This customization simplifies the process for both parties and further ensures timely payment.
Automated payment collection.
Customers opting into automated payments will make the owner’s life much easier. Consider this an opportunity to offer a discount. Most people who sign up for automatic payments forget what they’re signed up for anyway. It’s sad, but it’s true. If people opt-in to automatic payments at the lease signing, this is a win and will likely mean this tenant has no late payments.
If they’re unsure about automated payments, consider offering a percentage discount. While this is not something you have to do, it is an incentive you can consider if a tenant is on the fence about automating payments versus paying when they receive the bill.
What would the discount look like? For example, on the average 10×5 unit, the rent is $79 per month. A 5% discount saves the tenant roughly $4 per month. A 10% discount for automated payments would be $8 per month. Many people would consider it just to save $4. It saves them hassle and headache, and now $4. Offering a discount is something you can decide on with each tenant.
Multiple forms of communication.
Owners will still have tenants who do not use automated payments and prefer to pay once they receive the monthly bill. Eliminate every hassle to the tenant when it comes to making the payment. Communicate using every channel available – text message, email, and phone calls.
Text all tenants on the day that rent is due with a link to make payment. Follow up with a thank you text if payment is made upon receipt. Text on the first day after payment is late followed by an email and a voicemail message. Include a direct link to payment in text and email.
When rent is 7 days past due, text, email, and phone calls are used to collect payment with the information included about the process for liens in your state.
Quicklinks for payment.
Quicklinks are direct links that allow customers to pay without logging in to an account. It’s easy to lose track of usernames and passwords, so using a simple direct link for payment eliminates another hurdle for payment.
When collecting rent, the goal is to make it as easy as possible. Eliminate every obstacle to collecting rent and make it easy to complete the task. Owners should always check with state laws regarding rent collections, liens and auctions.
At Coastal Storage, we work with clients who own and operate self-storage businesses to ensure their success. We also find our clients their next, great investment. We would love to work with you. Call our team of experts today at 904-591-0140.