Self Storage- Raise rental rates or go for longer retention

[Henry Clark]

Had a person mention their source said average Self Storage retention was 19 months, so I looked up ours. And that some Self Storage companies were now focusing on retention versus ongoing Rate hikes.

Our locations:

Oldest location. Average stay is 38 months. Even with 1/3 being flooded out 5 years ago and losing all customers from this 9 year old facility.
Next oldest 53 months.
Latest location 27 months.

The last location is in an A market 1mm population. Once we near 100% with this location we will start to filter out the bad customers.  Which will cause our average retention period to go up.  The first two are in populations of 5,000 to 10,000 or B/C markets.

We have only raised rates about every 3 years and are at the top of our area in rental rates. We don't give any discounts except for the latest location; we do a fall discount of say $20 on a $110 rate where our occupancy is not 100%.

No move in discounts. All locations are 100% full except for recently added units. The latest location is 85% full, which is fine since we bought the land at a low price.

The 19 months average stay noted might have to be dissected more by market types. We are not close to that.

We actually don't focus on keeping customers, our focus is:

A. Getting rid of bad customers. We don't charge late fees. But if their autopays continuously don't process or they are troublesome we start to increase their rental rates. We also charge $100 Auction process fee even if they pay before the auction. We charge $100 for any trash. We call them and if not picked up by the end of the day, we pick up and charge $100 even for a pop can or bubble gum wrapper.  We have great camera systems and coverage.

B. Security- we spend a lot on cameras, sensors, alarms, etc. Catch and charge most break ins.

C. As noted above, we only raise rents about every 3 years. But are at the top of the market rental rates.

The above might actually cause our retention periods and rates to be higher over the long run.

Start small and Make Your Big Mistakes Early.