Texas Self Storage Association has served its self-storage industry members since 1986.  Headquartered in Round Rock, Texas, TSSA is the leading expert in self storage in the state of Texas.  Whether you're an owner, operator, manager or employee,  TSSA's blog will provide you with the latest tips, advice and knowledge for running your self-storage business. 

Stop Interruptions to Recurring Payments Due to Out-of-Date Card Information

Sponsored by CardConnect
April 21, 2021


Enabling a service on your merchant account to monitor customer payment accounts on a continual basis, to determine if the saved card data has become obsolete, will help you get in front of potential problems with expired cards and other causes of payment interruption. Some of the most common reasons that cause a customer's card data to become obsolete include:

  • A new card is issued due to suspected or confirmed fraud,
  • A replacement card is issued with an updated expiration date,
  • The account transitions to a different class or tier of card that requires a change in account number.

Whether you offer a subscription service or use recurring payment solutions for your business, you know how frustrating it can be to see transactions decline. Using an automatic updater to retrieve new card data can help your business to:

  • Update stored customer payment details with new data, without ever involving the cardholder
  • Stabilize and maintain cashflow by reducing late and declined payments
  • Reduce involuntary churn caused by expired cards or new account numbers
  • Reduce efforts and costs associated with merchant outreach due to outdated payment information
  • Improve customer satisfaction by avoiding interruptions in products and services as a result of nonpayment


Ready to take the headache out of cardholder updates?


Card Account Updater Is Your Solution

Card Account Updater is a feature embedded directly in CardPointe that automatically identifies Visa, Mastercard, and Discover cards that have been replaced with a new card number or expiration date and updates your stored customer payment details with the new card data – helping you avoid failed transactions or gaps in services provided to your customers.

When the Card Account Updater service receives updated card information from Visa, Mastercard, or Discover, stored customer payment information is automatically updated with the new details, and can be used for any individual payments made using the CardPointe Virtual Terminal, or used for any upcoming scheduled payments that are part of a billing plan.

Sponsored by:
CardConnect provides seamless credit card payment integration services for all businesses, protected by powerful security solutions. Click here to learn more. 


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Stop Interruptions to Recurring Payments Due to Out-of-Date Card Information

Best Practices

by Jennifer Jones, JKJ Marketing

There are so many things to consider when running your facility. If you’re in a major urban area like Dallas/Fort Worth, Austin, San Antonio or Houston, you’re probably seeing a lot of competition. What used to work may not anymore. Many of you are facing competition from the REITs, which report they are increasing their marketing budgets around an average of 25 percent.

So how can you set your facility apart? Do you spend money to make money? Do you increase your marketing budget, or make capital improvements? Knowing the right way to move forward and where to invest your time, money and energy is key to competing in an overbuilt market.

“On one hand, this business is incredibly straightforward: rent units, make money (lots of it at that),” laughs Sarah Cole with Oakcrest Management. “On the other hand, if you invest the time, training and money to ensure that you and your staff are properly trained and have the needed tools to be successful, the investment pays for itself many times over and allows you to sleep better at night.”

“We recommend setting a clearly defined standard or procedure for maintenance, operations, leases, etc.,” says Katie Cowen with Move It Storage. “If you have a clearly-defined process to guide your staff, you’ve set a standard that they know they have to adhere to. “You need to stay on top of things much more than you did in the past because it’s much easier for tenants to find storage now than it ever has been before. I saw a statistic this week that there are more storage facilities in the U.S. than there are Starbucks and McDonald’s combined. I have no idea if that’s actually accurate, since you can’t trust Internet memes for news, but I wouldn’t be surprised if it is.

“Competition is fierce now, and you can’t get by with ‘good enough’ anymore. You have to be great to succeed in the overbuilt market that we’re currently in, and this can mean needing to make significant physical improvements to your location if you want to keep up.

“Another factor now is the cost of hiring good help is getting steeper every day. The strong economy is creating a scarcity of entry-level workers and the days of a $9 or $10 per-hour property manager seem to be well behind us. We’re seeing major metro area salaries in the $13-16 (and above ) hourly wage level lately, with or without an apartment onsite to offer.”

“Agility is key,” says Monty Rainey of RPM Storage Management. “People tend to think of self storage as a static industry, but you really need to be ready to change tactics at a moment’s notice. What worked a month ago may not work today and what works at one facility may not work in a different demographic.” Some additional tips:

INVENTORY

Keep a rolling inventory of clean units, preferably two of each size, so you have ready-to-show units of every size in which you have a vacancy. Highlight the units on your vacancy report so all employees can easily reference available units.

MAINTENANCE

The most important maintenance tip is setting a schedule and adhering to it.

  Clean air filters on HVAC units every 30 to 60 days, depending on time of year.

  Set your HVAC thermostats to cool to 80 degrees and heat to 50 degrees. The objective is to keep the temperature in the range to protect stored contents, but not the same range you would keep an apartment or office. This saves energy and money.

  Keep the unit door tracks (and any exposed springs) lubricated to make the doors easy to open and prevent broken springs.

  Change the rubber gasket at the bottom of the door when it gets brittle to allow it to seal out dust.

  Keep the hall floors dry mopped weekly and wet-polished as needed to keep the halls bright and shiny.

  Perform daily walk-arounds/lock checks for security and to be visible to customers. A "nice but nosy" manager can help prevent problems before they happen and should always work to establish good rapport with customers.

  Keep up your property’s curb appeal. If kept clean and well-manicured with professional, friendly signage, it can help generate leases from drive-by traffic.

  Consider using a support ticket system if you have several facilities or a large facility. This allows your maintenance professional to know what tools might be needed before heading to the store. It also allows tracking of high-priority items.

  Keep the office area and the approach to the office looking fresh and clean. Often, owners who have had a facility for years let it look less than its best. Look at your facility with a fresh set of eyes.

  Keep signage as friendly as possible. Don't go overboard on rules signs.

CUSTOMER SERVICE

  Treat others the way you want to be treated.

  Respect everyone; it goes a long way.

  Use scripts to develop managers’ communications skills.

  Prepare a general escalation or upset customer document for dealing with difficult customers later in the customer life cycle.

  Role-play difficult situations with managers to teach them the best responses, practices and reactions.

LEASE

  Use a standard lease, standard addendums, and a scripted lease explanation. It is helpful in getting customers to understand and adhere to their lease agreements.

  Perform regular lease audits to ensure that you have 100-percent lease compliance at your facility.

OPERATIONS

  Have a clearly-defined operations manual—it is essential. If you don’t have one, TSSA has a very good basic operations manual that can be purchased. With minimal effort, you can make additions/revisions to make it your own.

  Perform a very comprehensive audit every month that includes property inspection, inventory, lease reviews, auction file reviews and a review of the financials.

  Have managers shop competitors by actually driving by the facilities to see what is new/different.

  Have a third party conduct telephone and in-person shopping to see how your facility is being represented.

  Focus on rental rates just as much as occupancy—both are important.

  Take time to have meaningful, unrushed conversations with your managers to let them know how much they are appreciated. A good manager makes a huge difference.

MARKETING

Marketing is really about staying on top of things and finding what works for your property.

“Marketing self storage is inherently different than most businesses,” says Rainey. “You’re not going to have much luck convincing someone who doesn’t need one to rent a storage unit. The key to marketing a facility is to put your name in front of that potential customer so that in six months, when the decision is made to clean out the garage, your storage business is the one they automatically think of. They’ve already been to your property when you had that event (car wash, garage sale, food drive, etc.) and already know your facility is well-run and maintained.”

Ultimately, as Tron Jordheim with Store Here Management says, “Every market is a bit different, and every facility has its own characteristics and quirks. There is a ‘right mix’ of people and technology for each site. The trick is to find the right mix for your particular needs.“

Processes are very important. If you have solid processes that are well suited to a particular site, and you follow those processes, things will run more smoothly and be easier to track and audit.

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Best Practices

Turn Your Neighbors Into Loyal Customers
6 Tips to Earn the Business of Your Community

by Aytcha Katun-Williams

Do you know where your self-storage customers come from? Most of your customers are located within a seven mile radius of your facility. Given that the majority of your customers are local, you will need to know how to attract local businesses and residents to pick your local storage facility over your competition. Below are six quick tips on how to gain the business of the community that your facility is located within.

1. Get the Attention of Your Neighbors

Self-storage property owners and managers have been utilizing community involvement to create a working relationship within their neighborhoods for a long time. While charitable giving is not a new concept to the self-storage industry, let's look at some creative ways to take your community involvement to the next level:  

  • Many storage facilities allow a small percentage of their units to be used rent-free by local charities, churches, schools and alike. In return, these organizations spread the word by mentioning this charitable giving on their website, during their events, but most importantly by word of mouth.
  • A storage facility in North Bethesda, Maryland has each drive-up unit door painted with unique artwork. The facility owner hosts a community art day every few months where artists come and paint the storage doors with an art theme of community charitable events. The event is an open house, food and drinks are served while the residents and businesses of the area view the artwork created by local artists. Not only does the facility support local artists, but it also increases its curb appeal while bringing new traffic to the storage facility.
  • How about allowing your facility to be a collection point for a charity organization or for electronic recycling? You can opt to collect for your local Food Bank, the Salvation Army or another organization. Most charity organizations have containers that they deliver to your location and do pick-ups on request. They then advertise your facility through all their marketing channels as a drop of location. Electronic recycling companies will need you to allocate one 10’ x 10’ drive up storage unit but they will do the rest of the work to advertise your storage facility as a drop of location and will schedule pick ups at your request. All of these community activities bring further visibility and new customers to your facility.

2. Know Your Local Businesses

Some owners prefer business customers, as they stay longer and are less price conscious. And, all businesses from dental offices to insurance companies need storage. Understanding how and when each different business could utilize storage will allow you to cater your sales pitch to the needs of that business. Becoming a member of local business organizations such as the Chamber of Commerce or the local Rotary Chapter is one good way to get to know local business owners. Attending the weekly meetings of these organizations and asking the right questions is crucial in finding out how you can help these businesses. What are all the different types of local businesses in your neighborhood and how can you serve them? It’s important to be able to think outside of the box. Your facility may be near multiple retirement communities with new residents who will need storage. Building that relationship with their management may mean steady and long-term storage rentals for your business.

3. Support Your Local Businesses

Giving back to your business community is one of the best word-of-mouth marketing methods. Offering storage units to local businesses at a discount or renting storage units to use as a workshop, selecting a local moving-supplies vendor for your point-of-sale items are all great ways of showing your support. Have you considered selling locally made ancillary products at your storage facility? You can sell scented car fresheners and other locally made products to show that you keep everything local.

4. Cross Marketing to the Next Level

Cross marketing is a tested and proven method for local marketing. Your local restaurants, insurance and real estate brokers and other businesses will gladly exchange business cards and flyers for cross promotion efforts. How about combining your next community event as a networking opportunity for the local businesses? Consider inviting several of your local businesses to be present at your next community event to network with the community and to advertise. Local business involvement will be key to a successful property-hosted event, with the incentives being self-evident.

5. Let Your Managers Get Creative

Leaving some lead room and allocating a small “local marketing” budget for the managers are key. When visiting local apartment buildings or retirement communities, take a basket of muffins or cookies. People love treats, and treats will help you to stand out above your empty-handed competition.

6. Grass Roots Marketing Via Social Media

Are you utilizing social media channels as a form of grass roots marketing? Social media is a free way to reach your target market and take your community relationships to the next level. Consider using Facebook, Twitter, Instagram and other social media channels to announce new local business tenants, to publicize your support of your local businesses or your next community event. Data shows that the ever-increasing number of social media users are checking their accounts several times a day. What better way to announce your support of local businesses, discounts to local residents and more! If you think about it, when working within our communities we go back to the basics. Whether it is a person or an organization, having their best interest in mind and finding creative ways to help results in their appreciation of what you have to offer, and brings new business.

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Turn Your Neighbors Into Customers

Winter Storm Provides Opportunity to Prove Grit, Help Tenants

by Holly Barr and Ginny Sutton, TSSA Staff
February 19, 2021


Texans are known for their grit. We pride ourselves on persevering through heat, drought, hurricanes, floods and tornadoes.

And now we’ll add “ice and snow super storms” to the list. This 2021 weather event will be noted in our state history and will surely earn a footnote in future farmer’s almanacs. Heck, this storm even warranted a name—Uri. We aren’t used to having names for our little ice events.

Usually, our ice storms are short lived and for most of us, staying off the roads while they are happening is the only impact we experience. Snow is even rarer, but this event didn’t provide the fluffy white stuff of our dreams. Our typical ice storms don’t threaten the power grid for the state or leave thousands without power through rolling blackouts or even for three to four days. They also don’t leave the multitudes without water or scrambling to deal with water leaks from burst pipes. Those are typically isolated incidents, and sometimes we know one or two people who experienced that. This time, it’s all around us, or we are in the midst of it ourselves.

Experts are predicting that this event will break records for insurance claims totals, surpassing claims from Hurricane Harvey in 2017.

Events like this have at least one silver lining—they give all of us the chance to see what we’re made of and how tough we can be when it’s needed. Numerous times during the past week as our power was off—sometimes for more than 8-hour stretches—I found myself thinking, “Can you imagine what it was like to experience this kind of weather back when houses weren’t insulated, and electricity wasn’t in the picture?” Anytime I felt a bit whiny or was cold I would picture pioneer mothers with their children hunkered down inside of timber homes with gaps between the logs and my pity party would quickly dissipate.

In addition to being tough, our members are givers. A few of you have shared with us what you’re doing to help those in your communities, but we know there are countless others who’ve helped, too. Send us your stories, so we can continue to share and encourage each other. We sent out an email to members earlier this week with resources available on our website, in case you didn’t see it, you can go to our home page and you’ll find our link to disaster resources.

So, what’s next?

  • Busted pipes
  • Flooding
  • Clean up
  • Food and water needs
  • Drinking water
  • Waiting for plumbers or insurance adjustors
  • Communal contempt for ERCOT (kidding, kind of)…

Maybe you’re wondering how you can help your tenants during this time? Some ideas…

  • Do you have an extra case or two of water in storage? Can you share with your tenants when they come to the facility?
  • Be prepared for people bringing in potentially wet items and have a script planned for how to tell them they need to dry them out before storing. Help your managers with resources.
  • Do you have a plumber in your network? Can you ask them for advice to give your tenants while they are waiting for repairs? Anything to prevent further damage?
  • Have numbers on hand for your city’s water and electric emergency numbers to share with tenants if they seem unsure.
  • Homeowners and renters are encouraged to reach out to FEMA online at www.disasterassistance.gov or 800-621-3362 if they are in need.
  • If you have the capacity, can you become an information hub for tenant needs and resources? Even a bulletin board outside? (“I have” or “I need” labels with notes and pens for posting, or business cards for contractors can be helpful.)
Did your office experience water damage? If you lost your printed leases or Goldbook©, reach out, as we will replace those lost TSSA resources. If TSSA can help at this time, please call or email and let us know what you need. We are still answering the phones at 888-259-4902 during regular business hours, or you can email us at info@txssa.org. We also continue to post helpful items to our website and social media platforms.

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Winter Storm Provides Opportunity to Prove Grit, Help Tenants

Your Sales Tax Questions Answered
From Tax-Exempt Customers to Sales Tax Permits
by Connie Heyer, TSSA Legal Counsel

Some of the more frequently asked questions I receive are about sales tax, including sales tax on parking. To assist you in your sales tax dilemmas, I have included those FAQs below.

Why do I have to charge sales tax when a storage space is used for parking? 

The short answer is, “Because it’s the law.” Sales tax is not due on the rental of most self-storage units. However, sales tax must be collected if the rented space is used to park a vehicle. A vehicle includes most anything required to be registered—everything from passenger cars to trailers and RVs. The size of the vehicle does not matter—the tax treatment is the same.

What is the general rule?

Your facility has the duty to collect sales tax on all rents and charges received for vehicle or trailer parking or storage. Your facility needs to collect the monies from the customer and remit them to the state.

What if I just rent a whole area of my facility to one tenant for parking, and don’t know how many cars are parking in it?

You need to pay sales tax on the total rent received; it does not matter how many cars are parked in the field. If you rent an area of your parking lot for $100/month, then you simply pay sales tax on the basis of rent of $100/month.

What kinds of things do I have to collect this parking sales tax on?

In other words, what is a “motor vehicle” subject to tax? Namely, it is cars, trucks, RVs, motor homes, truck trailers, boat trailers (without a boat on them), travel trailers (but not mobile homes), pop-up trailers, golf cart trailers (but not golf carts), tow dollies, tractor trailers and motorcycle trailers. Just about anything that moves on a highway or is attached to something that moves on a highway qualifies.

What if I collect rent for parking but don’t collect the tax?

Your facility is liable for payment of the parking taxes if the customer pays the rent but not the tax.

What if the customer pays nothing, including rent?

If the customer pays nothing (defaults on rent payments), no tax is due. Your tax duties relate to rent collected.

There are always exceptions, what are they?

There is no duty to collect and remit tax on an occupied boat trailer (trailer with a boat on it), or golf cart trailer with a golf cart on it, or unlicensed off-road motorcycle trailers with an off-road motorcycle on it.

What if the car in the rented storage space comes and goes?

In my opinion it does not matter; you have rented the space for parking and sales tax is due on the rent.

Does it matter whether the vehicle is stored inside or outside?

No, sales tax is due no matter whether storage is indoor or outdoor.

What if a vehicle is stored in an enclosed unit, and there is other stuff stored in there, too?

Sales tax must be paid on the dollar amount of all rents actually received by the parking/storage facility operator for the service of parking or storage. If the car takes up half of the unit, and other stuff is stored in the other half, you could in the lease say $X rent attributable to parking storage, and $Y attributable to non-parking storage. But, that may be more trouble than it’s worth, and may cause confusion with the comptroller. It is a business decision for you, and you should consult your own lawyer or accountant, but it might make sense just to charge tax on the entire rent and not open the door to questions in that regard.

What if I don’t know a vehicle is stored inside a unit?

Once you find out, start collecting and remitting sales tax. The TSSA lease expressly prohibits storage of motor vehicles without your express consent, so legally there should not be vehicle storage that you don’t know about. If you do allow vehicle or boat storage, it is strongly recommended that you use the TSSA Vehicle Trailer and Boat Self-Storage Rental Agreement.

What about a large mobile barbecue pit?

Mobile barbeque pits are considered to be motor vehicles (and subject to storage tax) or not based on the following test: Barbeque pits that have been mounted on flatbed trailers are motor vehicles and the charge for storage are taxable. Barbeque pits that have had wheels and axels mounted on them are movable specialized equipment and charges for storage are not taxable.

What if my customer is tax exempt?

Exemptions from the sales tax include: (1) parking or storage charges paid by governmental entities, and (2) parking or storage charges paid by religious, educational, or charitable entities that sign an exemption certificate and give it to the parking facility operator. Such exemption certificates must be kept on file for Comptroller audit purposes in case the sales tax reports are ever questioned.

Can I pay the tenant’s tax? Do I have to note in my ads or my lease that tax is due?

Your lease can state (you could insert into TSSA lease paragraph 6, special provisions, for example) that the “rental price includes sales tax.” But your lease must contain this language if this is your practice. And if your price includes sales tax, obviously you must remit the sales tax to the comptroller. For example, say your rent is $50/month and your lease says that this includes sales tax. You must back out the 8.25% tax. So, your rent income is really $46.19, and you must remit $3.81 to the comptroller. If you’re passing the sales tax through to your tenant separate and apart from the rent, you don’t have to include special language in your lease. If you provide an invoice or receipt to tenants, then you must separately state the sales tax amount on the invoice or receipt unless it contains a statement that the price includes sales tax. Parking signs, parking advertisements and other promotional information for parking cannot say that the parking facility operator pays the sales tax. However, they can (a) be silent on the tax; (b) say the price includes sales tax; (c) say the price is “plus tax.”

How do I get a sales tax permit?

If you allow vehicle storage, you must obtain a Comptroller’s sales tax permit and begin to make monthly, quarterly or yearly sales tax payments to the Comptroller. As a general rule, if you have less than $1,500 in sales tax per quarter you may file quarterly. If you have less than $1,000 sales tax per year, you may file yearly “upon authorization from the comptroller.” Authorization will depend on historical sales tax filings. You may call the comptroller at (800) 252-5555 to discuss this.

If I have a sales tax permit, what if I don’t have any taxes to report for the reporting period?

Even if you don’t have any taxes to report for your reporting period, you must submit a return for that period to the comptroller.

What other parts of my business are taxable?

Boxes, tape, snack foods and other products for sale. Also, you must collect and remit sales tax on all proceeds from your Ch. 59 auctions (with the exception of sales of vehicles and boats, outboard motors and buyers with exemption certificates or resale certificates).

What about free rent or other “giveaways”?

If you occasionally give away free rent, a disk lock, boxes or other taxable items as part of a promotion, sales tax is still due. You must pay sales tax at one “end” of the transaction, regardless of whether you give the items away. In this instance you would pay sales tax on the items given away such as boxes and tape, based on their purchase price from the wholesaler. For free rent, you would remit sales tax for the full rent. The “giveaway” items should be categorized as a “taxable purchase” on your sales tax return, reportable on line three of your sales tax return.

Is sales tax due only on rent, or on late fees and other charges related to default under the lease?

The Texas Comptroller’s office appears to have recently changed its long-standing position on this matter. The Comptroller as TSSA understands it is now taking the position that sales tax must be paid on all fees of any kind collected under a lease that contemplates parking.

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Your Sales Tax Questions Answered

Making Taxes Painless Starts with Clean Accounting

by Magen Smith, CPA

No one wants to pay more in taxes than they should, self-storage owners included. Working hard on your self-storage business every day of the year only to hand over a large check to the government on tax day is painful and unpleasant. However, seeking to minimize taxes smartly should be the goal for every business owner. Spending $60,000 on an unnecessary truck to save only $20,000 in taxes is a waste of $40,000. Too many business owners try to spend money to save taxes. Instead, focus on maximizing tax savings on the money already spent.

Below are some painless suggestions that will help you keep more of your profits this year.


Enter Income Correctly

Making taxes painless starts with having clean accounting records. Many of my clients have saved thousands of dollars in taxes each year simply by recording their income correctly. Income should be entered from the self-storage management system and then reconciled from the bank account. Far too often, all bank deposits are entered as income. These deposits likely include sales tax, security deposits and other potentially non-taxable items. Entering your income using the self-storage management system ensures revenue is entered correctly as rent, late fees, administrative fees, sales tax and so forth. It is also an excellent way to check if all of the money shown as collected in the self-storage management system was actually deposited into the bank account.

There are multiple ways of entering the income from the self- storage management system into the accounting system. Most self-storage management systems provide reports for daily deposits which can be entered into the accounting system. Using a journal entry report from the self-storage management system or integrating directly with your accounting system are two options.


Enter Expenses Correctly

Once the income in your accounting system is correct, add the expense information. Make sure all of the business’s bills and bill payments, payroll information, refund checks written to tenants, payments on bank loans, and owners draw amounts are added into the accounting system.

Excluding reductions in liability or changes in equity, the money spent in your business falls into two buckets: expenses or assets. Common expenses are advertising, dues and subscriptions, office expenses, payroll, repairs and maintenance and utilities.

Assets are items which will be used for years and should be depreciated. When buildings, vehicles, large office furniture, improvements to the building that extend the useful life, or machinery and equipment are purchased, they are shown on the balance sheet as an asset. Each year, depreciation expense is recorded until the asset is fully depreciated.

Depreciation rules constantly change, so it is wise to consult your tax professional to ensure that all assets are properly recorded. A common tax strategy in self storage is cost segregation. Many professionals will perform cost segregation studies to determine if it is a wise investment or not, but the basic strategy is using the useful life of each component to depreciate the asset. This will commonly increase depreciation in the first few years. Be aware, depreciation expense will eventually run out, and taxable income will increase in later years. Consult with your tax professional to determine if cost segregation is best for you.


Review Your Balance Sheet for Errors

Reviewing the balance sheet is an excellent way to save tax money and reduce personal property taxes if your state has them. I consulted with one client who had a building missing on his depreciation schedule for ten years so he missed all the depreciation expenses he could have taken. No one ever thought to determine what was included in the purchase price and it was all coded to land, which isn’t subject to depreciation.

Your tax CPA should be able to provide you with your depreciation schedule. Go through each item and make sure it still exists in the business. Also, look around at the assets and make sure they are on the schedule. Common items that will appear on a depreciation schedule are buildings, building improvements, parking lot improvements, vehicles, golf carts, computers, office furniture and any machinery the business owns


Working With an Accountant

The most painless and comprehensive way to make sure all of the right information is in the accounting system is to have a CPA familiar with self storage handle your accounting.

Once all of the accounting information is properly entered in the accounting system, it is critical that bank and credit card statements be reconciled. It is also wise to tie income numbers back to the self-storage management system to make sure the information is properly recorded. You can certainly do all of this yourself, but using a CPA who is familiar with self storage throughout the year can give you timely, relevant statements which will help grow your business.

Once it is time to prepare taxes, your accountant should provide your tax professional with the year-end statements, along with all supporting documents to make tax filing as painless as possible. Because your tax professional is looking at clean accounting records, he will be less likely to ask you to rummage around for some receipt from 11 months ago that you have misplaced. If the records are well-organized for the tax preparer, he can focus on advising on tax issues and helping plan for the future, instead of doing detailed accounting work. The best time to save taxes is throughout the year, not right before the filing deadline in April. By that point, it is too late to change the previous year. Meet with your tax CPA in the summer for a mid-year review and again in the fall so they can estimate the taxes that will be owed and give you advice on any last-minute changes to minimize your tax obligation.


Magen Smith started as a self-storage manager and went on to become a licensed CPA. Her CPA firm focuses on self-storage companies by helping them with accounting, getting started in the self-storage industry, raising rates, improving operations and providing audits so they know their business is running properly. She has online courses on revenue management and how to read Sitelink reports available on her website.

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Clean Bookkeeping for Painless Taxes

Top 5 Weird Legal Questions

by Connie Heyer, TSSA Legal Counsel



1) “I’ve forgotten where I put Aunt Betty ….”


Question:
I recently purchased a facility and found a unit that the previous owner was using to store personal items left behind after auctions. Going through the items, I found an urn containing human ashes. There is a name for a funeral home on the box, so I contacted them and asked them to contact a next of kin. They were unable to locate anyone related to the deceased. I still have the ashes in my possession. What should I do?

Answer: First, call your nearest relatives right now, tell them you love them, and ask them to pretty please not forget you in a storage unit after your time comes.  Then, try to locate the former tenant and send him the ashes. Consider hiring a skip trace service (akin to a private investigator) to trace the current location of the former tenant. Normally, these searches cost under $100, and it is amazing how quickly a good skip tracer can locate someone when given a name and former address. Then attempt to contact the tenant, and ultimately, if you can confirm it is the same person, mail the ashes.

If you and/or the skip trace service are unable to locate the former tenant, document your efforts at locating him (calling the funeral home, hiring skip trace, doing Google search, etc.). Send a letter to the last known address for the tenant, and mark “address correction requested,” explaining the situation and summarizing contact efforts to date. Tell the tenant that the ashes will be scattered over uninhabited public land if he doesn’t make arrangements to pick them up by a deadline. If the tenant fails to retrieve the ashes by the deadline, scatter them over any uninhabited public land (this is legal in Texas).

In an auction situation, if you find ashes or other personal items prior to an auction, go ahead and auction them in order to “clear title” so to speak. Then, if you wish, ask the buyer to voluntarily leave it behind. Auction rules can contain a clause stating, “Buyer is requested to leave personal items found in the purchased unit (scrapbooks, family photos, etc.) at the facility or return them to facility if later found.”

I generally don’t recommend putting the tenant in contact with the buyer. If a tenant inquires as to who bought the unit contents in an attempt to recover personal effects, it is probably best to tell the tenant you will be happy to provide the buyer with the tenant’s information and leave things up to the buyer.

2) Smile, you’re on candid (dummy) camera…


Question: We have a tenant who claims that his unit was opened, and items were removed overnight. We did not notice his lock removed or broken on our morning walk-through of the property. He is demanding that we turn over our surveillance tapes from the evening in question. Our cameras are decoys and do not function. How should we respond?

Answer: Tell the tenant that the video cameras in question are non-operational and there are no video surveillance tapes to hand over. Refer the tenant to paragraph 15 of the TSSA lease, which clearly states that “video cameras may be non-operational or unmonitored.” In addition, refer the tenant to the paragraph at the bottom of page 1 of the TSSA lease, including the language: “No representations of safety or security have been made…tenant hereby releases lessor…from loss or damage to property…”. (The tenant should have initialed this paragraph.) Finally, refer the tenant to paragraph 20 of the TSSA lease, which requires tenants to purchase insurance or self-insure and relieves the lessor of all liability for the security of the tenant’s property.

If your self-storage facility does have working cameras, consider adopting a facility rule outlining the circumstances under which you will allow tenants access to video, (e.g. “Video cameras may be non-functional or unmonitored at any time). Facility has no duty to keep any surveillance video for any length of time. If video is stored, facility may at its discretion deny access to video, limit access to such video to law enforcement officers, or otherwise condition access.”

In the situation of a break-in or tenant claim of loss, remember that by definition, self-storage is “cared for and controlled by the tenant.” It is the tenant, not the facility, who is responsible to “care for” his unit’s contents. Consider also requiring all tenants to initial an express insurance refusal document such as Form ADD-7 “Insurance Acknowledgement” found in the Members Only section of txssa.org.

3) Dealing with Credit Card Deadbeats


Question:
We have a tenant who has been paying via automatic credit card for years. Last month the charge went through without a hitch. This month, payment on auto pay was declined so the tenant came in and authorized payment. He has since declared both of these payments fraudulent, disputed the charges, and his credit card company has returned the money to him. The question is, can we take him off auto pay so this does not continue to happen or do we need to get his written authorization to quit running his charge? Due to his action, he is now in lien status.

Answer: Paragraph 5 of the TSSA lease allows the lessor to change the permitted mode of payment at any time upon notice to tenant (e.g., “Dear tenant, your autopay will no longer be accepted.  As of today, all payments must be via cash or credit card.”) You may remove this tenant from autopay by sending such a notice. Although there is no duty to send the notice via certified mail, it is recommended in order to have a record of the notice.

In addition, TSSA Form ADD-6, “Authorization for Automatic Credit/Debit Cards” (also in the Members Only section of txssa.org), expressly allows you to prohibit further automatic payments if a payment is rejected. The form states: “We reserve the right with advanced written notification to terminate your participation in this payment option” and it provides that if an auto-pay is rejected, tenants will be required to provide an al- ternate method of payment. An automatic payment being rejected is no different from other types of non-payment, so you may require an alternate method of payment for this reason as well. Remedies for auto-pay rejections and/or non-payment include late charges, overlocking, and the lien and foreclosure process.

4) Foiling an angry husband’s would-be plot


Question:
I have a tenant who is getting a divorce, though every other week the couple seems to be reconciling. Right now, the wife is the only person on the lease (no one is listed as having additional access rights) and she stores a really nice RV. The wife asked me to change the entry code so that her husband could no longer get in and I honored her request. The other day the husband showed up at the facility saying that he wants to rent a small unit from me (he didn’t want to say what he had to store) and asked if he would get his own entry code to gain access to the facility. What should I do? I am pretty sure that as soon as he has an entry code, he will drive off with the RV.  The rent is paid up to date. Should I warn the wife about the husband’s action?

Answer: You may warn the wife if you wish; that is your business decision.  I would tend to stay out of it. You do not have a duty to refuse to rent to the husband, but in my opinion, you made a wise business decision in not renting to him. If you do warn the wife, unfortunately this could make her decide to rent elsewhere, and/or create an unrealistic expectation that you will notify her anytime her soon-to-be ex-husband tries to rent or otherwise gain access in the future.

If you do choose to warn the wife, I recommend you do it in writing, in order to prevent a “no good deed goes unpunished” situation. Send a notice that reads something very generic like: “Dear Suzy, this is a courtesy notice to let you know that your husband attempted to rent a unit at our facility recently.  We are happy to provide this notice as a courtesy; please take any appropriate measures you believe warranted in order to safeguard your stored items in the future.”

Regarding spousal conflicts in general, these situations are one of the primary reasons that you only want one tenant’s name on the lease. A spouse may be listed as a person with access rights or as an emergency contact, but only one person should be listed as the tenant. Generally, I recommend that self-storage operators try to stay out of issues regarding feuding spouses. Do not grant access to a spouse who is not a tenant or listed as person with access rights, even if the spouse pays for a delinquent balance. Bottom line—unless the individual is a tenant or person with access rights, no access! Regarding persons with access rights and emergency contacts: you have the right, but not duty, to assist them in lock cutting. If you sense, or know, that this is a feud, decline to assist.  Wait for a court order or other firm resolution.

5) Tenant made himself at home (sweet home)


Question: There is a tenant who is sleeping in their unit, what do we do?

Answer: This answer will hit the highlights of the process. For a complete description please see the “Eviction” tab in the TSSA Goldbook©.  
First, give the tenant three-days written notice. The notice should be delivered in person to the premises (the unit) or by mail to the premises in question. Mailing will be challenging because needless to say mail is not delivered to individual units. So realistically you will need to hand-deliver it.  You may use the form E-3, “Notice to Vacate Storage Space for Non-rent Breach of Rental Agreement.” All of the forms may be found in the Members Only section of txssa.org. The tenant’s lease violation will be living or sleeping in the unit in breach of TSSA lease paragraph 36c. You will need to be able to prove this breach, so you will need as many witnesses as reasonably possible, ideally a manager and at least one other employee or other witness, to be able to testify to his sleeping or living in the unit. If the tenant enters with an access gate code your gate software should be able to show that he came in at a certain time and never left until the next day for example.

An alternative and more straightforward eviction action would be to give the tenant 15-day notice of lease termination pursuant to TSSA lease paragraph.  This notice should be sent to his address listed on the rental agreement, or the last written change of address the tenant has given you. (But for good measure, if you find him at the premises, also hand deliver a copy.) Then to evict, you don’t have to prove any breach other than that he did not vacate at the end of the 15 days.  

If you would rather not have to prove that he is living at the unit (which he will likely deny and you never know what a judge will do) and want to go this route, give the tenant TSSA form E-1 “15 Day Notice of Termination of Storage Rental Agreement.” Then at the end of 15 days, if he hasn’t vacated, give him the form E-4 “Notice to Vacate for Holding Over.”   If he is not out at the end of the three-day period outlined in the Notice to Vacate for Holding Over, then file an eviction petition with the Justice Court, citing holdover as the reason for the eviction.

At the time you give him the 15-day notice of termination or the three-day notice to vacate for sleeping/living in his unit, I would suggest you also try and talk to the tenant and try and get him to voluntarily vacate. Tell him (or leave him a separate note) that if you have to evict him, he will be responsible for all legal fees and court costs under the TSSA lease, and he will have the eviction on his record, which will hurt his chances of being able to find another place to live. See if he will voluntarily vacate.  

 

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Top 5 Weird Legal Questions

Everything You Need to Know About Online Auctions

by Sarah Cole, Oakcrest Management

As technology continues to advance, the self-storage industry is advancing with it. One of the most recent changes is with online auctions. Thanks to the hard work of TSSA, Matz & Co. and Connie Heyer pushing new legislation through, online auctions are now part of the Texas Property Code. Many companies started making this switch over the last few years, but the rest have been watching the industry to find out what is going to benefit their facilities the most. One of the best ways to figure out what will work for your facility is to weigh the pros and cons of both in-person and online auctions.

The concept of online auctions has been around for quite some time. Online auctions started with individuals selling and auctioning personal items on sites such as eBay. Now we have the ability to utilize online platforms to auction off the contents of storage units. 

Online auctions are not just another fad or trend.

When the TV show “Storage Wars” aired, self-storage auctions started get- ting some publicity and now the general public finally knows storage unit auctions are an actual thing. So why did the market start shifting to online auctions?

“Online auctions seem very interesting,” says Ashley Montessoro of Lockaway Self Storage. “It is something new, gets the property name out to a new group of people and seems like it may be easier on our managers.”

Lower attendance at more rural properties is the reason Ryan Rogers, managing partner at Store  Here Self Storage, started looking into online auctions. Online auctions open the door to more potential bidders, the bidders have more time to view the items in the unit and they have more time to bid.

Another reason is the amount of time it takes to conduct an in-person sale on auction day. “It is a disruption of the property’s normal business day,” says Rogers. “Especially if you have more than one location to visit, it takes up your entire day.”

April Young of Ultimate Properties says, “When traveling from property to property on auction day, the number of bidders dwindles and by the time you get to the last property, you’re lucky if you still have one or two people show up for the auction.”

Liability, liability, liability is what we hear at every legal session we go to when it comes to onsite auctions.


It is the overall liability of a group of people walking the property on auction day. What if someone trips and gets hurt?

“With online auctions,” Montessoro states, “There is also the bonus of not having a large crowd walking around the property once a month.”

Also, the worries we have about having to handle altercations are now gone when you use online auctions. “You also don’t have people coming onto the property and causing a stir with the customers,” notes Ann Parham of Joshua Management Corporation.

Buyer collusion can also be a problem with onsite auctions. “The people who follow the auctioneer know each other and they start to negotiate with one another before the unit is even up for auction. It causes price setting,” explains Parham.

Online auctions seem to solve a lot of potential concerns and issues we face every month, but still many of us are hesitant to make the switch.

“I’m not so sure it is hesitation that has kept us from switching as much as it is us wanting to keep those hands- on, face-to-face relationships with our bidders,” Young explains. “There is also a sort of comfort in knowing all of your paperwork is right and the auction was processed correctly.”

Even though they have only been doing online auctions a short time, Montesorro has noticed, “There is the potential to make simple mistakes when setting it up online. Your managers really need to pay close attention to detail or the auction may have to be cancelled.”

Some locations have a great auction crowd. Some of us like using an auctioneer who has their own following, which also gives us a second pair of eyes on our lien paperwork to ensure the sale is conducted properly. And some of us like to just get these auctions done and over with. Instead of waiting several days for online auctions to run, and then potentially another 24 to 48 hours for the highest bidder to come in and pay (unless they pay online); in-person auctions are all over in one day.

“Buyers not showing up to pay after bidding” is an issue Rogers has seen with online auctions. “With in-person auctions,” Rogers says, “We know right away if a buyer does not have the money and can sell it again quickly.”

Once you’ve weighed all the options and you’ve decided online auctions are the way to go, where do you begin to look to find the right online platform? When looking at all of the different options, put yourself in your customer’s shoes. What is most important to you? Is it price or customer service that is the deciding factor? You want to know that the platform you use will back you up if there is a mix up or any issue with the auction. Here are a few of the platforms available to you (some of this information is taken directly from the company’s website).

IBID4STORAGE.COM


According to their site, iBid4Storage. com has managed self-storage locations and been involved in the self-storage auction process in Canada and the United States for the past 22 years. “We continue to be innovators and leaders in the self-storage industry and have created a marketplace where both sellers and buyers of storage auction units can benefit and prosper.

“If you’re a storage unit owner or manager who is looking to recover your losses, online storage auctions are a great way to find bidders and to advertise your auction without the crowds and inconvenience that come along with having a physical storage auction at your facility. Research has shown that owners get three to five times more for foreclosed storage unit contents with an online sale.”

“We chose iBid4storage because they were friendly, acted like they were interested in gaining our business, were willing to negotiate rates and followed up consistently, even after gaining our business,” says Rindge Leaphart, COO of Oakcrest Management, Inc.

SELFSTORAGEAUCTION.COM


From the founder of Storage Battles, SelfStorageAuction.com is ready to revolutionize the storage industry. From their site: This new website for online and live self-storage auction listings is built to “provide the most safe, manageable and efficient platform for online self-storage auctions to be held.”

Most self-storage auctions are now being held online. “Our site not only speeds up the sales process, it completely eliminates the need for live, on-site auctions. Facilities can easily prepare auctions in advance and increase profits by expanding their customer base.”

STORAGEAUCTIONS.COM

Owned by Lonnie Bickford, StorageAuctions.com is a robust online auction site for foreclosed units. According to the StorageAuctions.com site, you can find the best storage unit auctions as a bidder and reach a faithful audience of bidders as a seller.

Storage facilities can also streamline their auction process by listing their inventory in one place for both live auctions and online auctions. Storageauctions.com reduces the hassle and you can list with confidence knowing your unit will be viewed by a much larger bidder base than those who might show up in person for a live auction.

STORAGESTUFF.BID


According to their site, StorageStuff.Bid is made up of a combination of self- storage owners, licensed and experienced storage auctioneers and a team of technology partners who specialize in internet marketing and web design. “Together, we have more than 50 years of experience in the self-storage industry.

“We understand the needs and goals of storage owners and operators. We understand the consequences of accounts receivable and bad debt. We also know that storage operators are in the business of renting storage units, not selling them. We offer storage operators a quick and easy way to empty units that have gone through the lien and foreclosure process.”

STORAGETREASURES.COM


StorageTreasures is a free, social site to find live onsite storage auctions or online auctions at any self-storage facility across the United States and Canada.

StorageTreasures.com was founded by SSA members and self-storage professionals who have more than 60 years of experience in the self-storage industry.

StorageTreasures has revolutionized the way in which the contents of self- storage units are marketed and publicly auctioned after the tenant has failed to pay rent. The site fills the gap between the operational systems that the industry currently utilizes and the public buyer who may be interested in the contents of a unit going to auction. The tools StorageTreasures provides allow the storage industry not only to comply with, but also exceed the intent of state laws governing the self-storage industry, protecting tenants and bidders alike.

“We use storagetreasures.com,” says Montesorro. “Another branch of our company has been using them for a couple of years now. Plus the customer service response, we have received from them is really nice.”

TIPS FOR TRANSITIONING TO ONLINE AUCTIONS

You’ve decided to give online auctions a try. You did your research and picked the online platform that suits your business. Now you ask yourself, how am I going to transition this new process?

What procedures should I follow to make sure I don’t miss selling a unit? Since several of us have been doing them for a while now, we have some suggestions. Remember everything up to your notice of sale and auction ad are the same:

1. Seize the unit

2. Send out the Notice of Claim

3. Inventory the unit for the auction ad

Now this is where the changes come into play.

4. When you publish the Notice of Public Sale in the newspaper, it must contain the following:

  • Statement that property is being sold to satisfy a landlord’s lien
  • Address of the facility (where the unit is located)
  • Website address for the auction
  • Start date/time and the end date/ time for bidding (and any other terms of sale)
  • Tenant’s name
  • General description of the property

5. Mailing a printed Notice of Public Sale to the Tenant is optional and not required by statute.

Next, list your units on the auction website. Most people take additional photos for the online auction in addition to the standard lock cut photos. Some supervisors find it easier to wait approximately five to 10 days before the auction starts to go back to the facility to get the additional photos they need.

“This is a great time to thoroughly review the auction file and make sure all of the notices were sent correctly,” says North Texas district  manager for Storage Depot Jay Hoger.  “The week before the auction starts is a great spot in the timeline to take the additional photos and upload them to the auction site because there are a lot of tenants who pay between lock cut and auction. Therefore, the closer you wait to the auction date to take the photos, the fewer units you will need to photograph.” Uploading the photos to the site a week before the auction is supposed to start will give prospective bidders the opportunity to preview the unit.

Double check… no… triple check that the photos match the unit you are listing. You don’t want to have an upset buyer come in and pay for a unit and then open the door to find out it does not contain the items pictured. Nor do you want to have to pull a unit from auction because you didn’t upload the photos or forgot to schedule a unit online for the auction.

When the auction ends, the auction site will notify you as well as the highest bidder with all of the pertinent information on the sale.

We have found it is best to wait until the buyer comes in to pay before closing out the sale. There is the occasional no-show and most of the auction sites will give you the second-place bidder’s information, so you can contact them to purchase the unit. However, TSSA legal counsel  Connie Heyer’s opinion is that the bidder is not required to pay at the facility—they can simply pay online. It is important for your auction rules to list all terms, including what will happen if the original bidder defaults on the sale. It is also important that the online auction site rules don’t conflict with your facility’s auction rules.

There are pros and cons with online auctions and a lot to consider when you are switching to a new procedure. As self-storage advances into the technological age, are you ready to advance with it by making the transition to online auctions?

Sarah Cole joined Storage Depot seven years ago as the audit manager. In addition to overseeing the audit process for the entire organization (32 stores and growing), she provides support to the management team regarding auctions, process improvements and general day-to-day operations. Sarah is also a degreed paralegal.

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Everything You Need to Know About Online Auctions

Turn Your Slow Season Around

by Tron Jordheim

The “slow season” is upon us. That time when the winter holidays are approaching and cool weather is blowing in is usually not the time when you see peak demand in self storage.


Slow Season Marketing Tips

Rent as many units as you can, however you have to rent them, so you start with maximum physical occupancy when the spring busy season comes. Maybe you are feeling pretty full and happy. That is great. Why not challenge yourself to see how much you can grow your net operating income next year?


Test Demand

You have only two factors to consider: demand and supply. Big surprise, right? So first, test demand. Don’t change your rental rates, but if things are slow, advertise aggressive move-in specials. First-month-free, or first-month-for-a-dollar specials are hard to beat.

These strategies have been proven over and over again to be successful. Run your special, in combination with market rates, for the first month of slow season. Advertise it with some gusto. Spend a few bucks getting it out to the marketplace.


Measure Your Success Rate

Was your pace of rentals better than last year for the same month after running the special, or about the same? Were your conversion rates 60 percent or better? If you got 10 inquiries, did you rent to at least six of them? If you did not rent to someone, was it because of something other than price?


Review Your Supply

How did it affect supply? Still plenty of units? Or, getting tight on supply? If you are tight on supply, repeat the same special for a second month. Repeat the analysis each month during the four or five months of slow season.

I know owners hate giving the first month free. But if you are giving a free month to people paying market rate, what are you complaining about? When you start month two, you’ll be large and in charge, so get aggressive with first month free. If your month-end tests show you are not getting tight on supply and have plenty of units still left to rent, and your conversion rates are not 60 percent or more, cut asking rates. Yes, I said it, cut asking rates.

However, you must make it plain to people when they rent at reduced rates that these rates will discontinue on March 1, April 1 or May 1, whichever day correlates best with the start of your demand season.


Bring Rates Back to Market

Present the reduced rate as 20 or 30 percent off market rates until March. This makes it easier to go back to market rates when it is time, and fewer tenants will move out when you take them to market rates in anticipation of strong demand.

Empty units don’t help you in the slow season. Any income is good income if the other option is no income from an empty unit. The more physical occupancy you have at the start of high demand, the better position you are in to move market rates up early in the season. Many of your discounted renters will accept the increase to market rate and will not move out because they are expecting it. Some will move out, which will give you more units to rent at market rate. If they do move out, they will do so without bitterness or remorse because you made it clear to them from the beginning when their rates would go up to market rate.

You may have local conditions that won’t allow you to implement this strategy or another situation that will make this the wrong strategy for your site. You’ll need to decide for yourself.

But in the vast majority of cases, this will result in additional income for the last month or two of the year, which is always helpful. It will also result in additional income for the first few months of next year. And most importantly, it will be like rocket fuel for your efforts to maximize the high demand next spring to build maximum income for each quarter in 2018. This all means a big gain in net operating income.


Advertise Your Specials

What are the best ways to advertise this? Put it on your website. Put it in your social media. Use Google Ad words. Put a yard sign in front of your site. Get a big teardrop banner and set it out front by the curb. Put it on your main sign. Say it in your on-hold messaging. Say it upfront on the phone. Put out fliers in the areas of your neighborhood that are most likely to bring you some attention.


Reassess in the Spring

You may adopt a completely different strategy for move-in specials come April or May. You may be full enough and may have raised rates enough that you don’t have to offer any move-in specials next summer. You may want to tweak the specials by unit type. See how things look in the spring and decide as you see what your local conditions look like as the season develops. In any case, I’d be glad to hear from you next spring regarding how this slow season strategy was a winner for you.

Tron Jordheim is the business development manager for Store Here Management/ RHW Capital Management Partners, and a consultant in sales, call center practices, marketing and management. Tron has writ- ten three books, is a frequent speaker, and is a contributor to industry trade journals. Tron was a pioneer in search engine optimization, digital marketing and social media. Tron’s clients and employers have gained billions of dollars in asset value from what one self-storage industry icon described as his “quirky brilliance.”

 

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Turn Your Slow Season Around

When Storms Strike: Key Takeaways to Help You Prepare

by Taressa Dominguez
11/18/2020

When disasters strike or hurdles arise, they can be unpredictable. And though you may not know the timing or extent of impact, you can prepare your facility and staff to tackle whatever comes at them by creating a plan of action that is precise enough for your staff and tenants know what to do and expect, but is also flexible enough to adapt to the situation. At the Bigger Ideas in Storage Conference, the Move It Self Storage team of Tim Springer, Tom Maxfield, Katie Cowen and Jesse Munoz shared their expertise on how to respond to disasters. With about half of their properties within 30 miles from the coast, preparing for a storm is a constant and top priority for Move It. Here are some key takeaways from their session for when a storm rolls in.

  • Plan ahead and prepare for the worst so you can make the best decisions possible while evaluating your risk.
  • Prioritize communication with your staff and tenants. If you have advanced warning of a storm, plan on frequent and regular communications so that staff and tenants are kept apprised of details and your disaster plan as the situation evolves.
  • Notify vendors/work crews before the storm that you may need help to get up and running after the storm.
  • If you have time when preparing for a storm, file a “notice only claim” with your insurance so that you have a claim number ready in case you need it.
  • Power down important mechanical features at your facility, like gates and elevators. This will help ensure a tenant does not get stuck in an elevator and that the gate doesn’t become a safety hazard.
  • Make sure to notify tenants via phone, text, email and website of your evolving plan so that they can make their own plans. Tenants may be storing their emergency supplies and need to know when they can access them.
  • If you anticipate an increase in demand after the storm, evaluate your marketing spend. You will likely be able to save money by decreasing your Pay-Per-Click (PPC) if you know your demand is about to increase organically.
  • Ensure that you can do business, even in a basic way, after the storm. Consider having an “office in a box” at hand with a hotspot and TSSA paper leases included.

There is a process to responding to each stage of the storm—before, during and after. Above, we’ve focused on preparing before the storm hits, but in every stage, communicating your plan to staff and tenants is vital. We thank the Move It team and invite you to watch their full presentation, “When Disaster Strikes: Will You Flounder or Float?” on the TSSA website. If you missed the annual conference and want access to this recording and many more, you're in luck.  With the Post-Conference Pass, you will have access to 12 conference session recordings for a full year, so you can dive deeper into disaster preparedness and so many additional self-storage topics.  


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When Storms Strike: Key Takeaways to Help You Prepare

Management is the Key to Your Success

by Pamela Alton

The key to success is not just finding and hiring a good manager or what wages and bonuses you should offer, but you must also consider training your self-storage staff to be successful! Once all of this is in place, then there are other things to consider such as regular audits and inspections, site visits, employee reviews and "de-hiring" staff, all worthy subjects to touch upon down the road.

Obviously I can't possibly go into depth on each subject; however, I am going to do my best to try to give you some insight from my 26 years in the self-storage industry and hopefully I can get your creative juices flowing by giving you some ideas to help you be a better self-storage owner or operator and increase your bottom line!

FINDING AND HIRING MANAGERS

First let's talk about finding and hiring good managers. As we all know, the people you choose to manage your facility will make the difference between a highly successful operation or a mediocre one. Finding that perfect management staff is not always an easy task to accomplish!  Where do you find them and what do you do with them once you have them?

To find managers, you can place an ad on any number of employment websites available today, such as Monster, ZipRecruiter, Indeed, CareerBuilder, Craigslist, WorkingCouples.com (if your position is for a resident manager team), trade magazines or use one of the placement services such as my company, Mini-Management Services, or Kelly Services. You can also ask for referrals from your current managers or other owners or operators in the industry. Getting people to respond may be the easiest aspect of your management search.

However, interviewing and matching the right manager with your facility is not so easy.  Everyone can be on their best behavior for an hour, that is why it is important to interview your selection of candidates more than once. If they are currently employed at a facility close enough for you to visit them, you should consider that, providing you get their approval. Most managers seek new employment confidentially and don’t want to jeopardize their current position.

When interviewing candidates, consider their individual talents and match the management personality with that of the facility position you are trying to fill. Traditionally, if you have on-site housing, most full-time resident management staff consists of a husband and wife team. Just because the woman is usually the one that is behind the desk and the man is the one that is responsible for the maintenance, doesn’t mean that she is better at office work and he is better with repairs.  Sometimes she is better at maintenance and he is better with the computer! Perhaps he is more outgoing than she is and would be better at outside marketing.  Again, look at the talents of each manager and consider giving them job responsibilities that are best suited to their strengths.

REFERENCES AND BACKGROUND CHECKS

Once you have narrowed down the best possible candidates, then you must check their work references, and when I speak of "work references," I mean past supervisors or owners, not tenants or co-workers, friends or relatives. Do you think they will provide references from friends or family who will speak ill of them? Of course not!

Some large companies will not verify anything more than employment dates and job titles. I have been in this business for a very long time and know a lot of people, and thank goodness I am lucky enough to get a little more information than most because people know they can speak candidly with me about an employee and it won’t go any further than me! 

I also suggest if a candidate is currently employed, have someone telephone shop them to evaluate their telephone skills. You want to make sure the person you hire answers the telephone in a timely and professional manner.  In addition, you want to make sure the person you hire tries to close the sale by scheduling an appointment to visit the facility and rent a space. We all know how much it costs to generate a call, and we want to make sure it pays off by having a professional answer the phone! 

Next, you will want to conduct a background check. There are numerous companies that specialize in background checks, personality tests, drug tests and credit reports.  You can find these companies on the Internet or ask other owners for recommendations. 

LETTER OF EMPLOYMENT AND APARTMENT LEASE

Once you have done your "due diligence" on the possible candidates and have selected your management staff, then you should have them sign a letter of employment and an apartment dwelling lease if you have a resident manager apartment on-site. Your letter of employment should spell out the manager’s typical job duties, their rate of pay and bonus structure as well as the goals you have set for the manager to achieve. This way, you and your manager are on the same page as far as what is expected by both parties. Most states are "employment at will," meaning you can give notice to the manager or the manager can give notice to you to end employment with your company.

If you have a resident manager’s apartment on-site, and yes, I still see new facilities being built with resident manager apartments, please make sure it is someplace you would live.  If possible, have an outside patio or balcony so the manager can get outside with some privacy.  No one wants to drag their BBQ out onto the driveway to grill a steak with moving trucks or tenants driving by! You will attract a better quality manager with a nicer apartment and amenities.

This is where the apartment dwelling lease comes into play! It should cover things like:

  • Manager will reside in the apartment rent free as long as they are employed by the facility;
  • Manager will vacate the apartment once employment ends;
  • Apartment is to be used as a residence for the manager and cannot be rented out;
  • Manager is responsible for any damage caused by themselves, their pets or children, etc.

The lease comes in handy for the eviction process if you fire a manager because things went south and they won't vacate the apartment. I personally have never had this happen. However, I have heard the horror stories of a manager who squats down and won't vacate the apartment. Will a lease stop this from happening? No, but it will make it easier to evict your ex-manager and get your apartment back.

MANAGER WAGES AND BONUS PROGRAMS

While I am on the subject of letters of employment and apartment leases, let's talk about manager wages and bonuses I see offered in the industry today. Please keep in mind that most managers do not contact me for placement to make more money, that is usually their third reason on the list of why they are looking to make a change. However, paying a good manager a few hundred more per month than the owner down the street is a drop in the bucket for a manager who can make you thousands more per month! When I mention wages, there are a couple of factors that need to be considered, such as on-site or off-site, team or single, hourly or salary and don't forget relief managers. I am going to be brief and to the point on this one. 

RESIDENT MANAGERS:

Team salary: $3,400 to $5,000 per month

Single manager salary: $2,200 to $3,000 per month

NON RESIDENT:

Usually single, hourly employees: $12 to $20 an hour

RELIEF MANAGERS:

Hourly: $11 to $13 an hour

*These numbers are general and based upon Pamela Alton’s experience in the industry.

These wages are general in terms. Some managers may make more and the size of your facility may come into play. I currently have an opening for a resident manager at a facility with 450 units north of the San Francisco Bay area.  The position provides a single, two bedroom, two bath apartment. In addition to the apartment, it pays $17.00 an hour with some participation on medical and a bonus program. 

People will say, yeah, but that's in the San Francisco area. Yes, it is, but a gallon of milk and a loaf of bread is still pretty much the same everywhere. Yes, it is probably higher to live in that area and rental rates are going to be higher as well. The point is, pay your people well for your area and keep in mind that you cannot use the cost of the housing to offset any minimum wage deficiency. In other words, you cannot say to a manager, “I am going to pay you $2,000 per month, but $600 of that is for the apartment, so I will pay you $1,400 per month and along with the $600 for the apartment, your wage package is $2,000 per month. Oh, and by the way, I expect you to work six days a week.” You can do that, but you may find yourself in a situation down the line with the labor department and owing your managers back wages! Not to mention having one heck of a time trying to find a manager to work for that.

Let’s move on to bonuses. Keep in mind, the best bonus program is one that motivates and is achievable. There is nothing more "de-motivating" to a manager than a bonus program that is over complicated and can’t be understood or achieved.  Also, what motivates one manager may not motivate another. Money is always a good bonus, it is usually the right fit and color and will never be returned to the store.

Bonuses can be based upon different variables such as: increasing occupancy levels and monthly income, reducing delinquency and collecting bad debts, being paid for each signed lease, making or exceeding the annual budget figures, renting spaces at full price without discounts or free rent. They can also be based on cleaning up a distressed or dirty facility and office, by doing an outstanding job on the telephone when shopped by a telephone shopping service, by selling merchandise, packing and moving supplies, property protection or renting rental trucks, etc.

Bonuses can be paid in different ways. They can be paid annually, quarterly or monthly.  Besides giving the manager a monetary bonus, bonuses can take other forms such as: vacations or mini-trips, gift cards or other luxuries such as a flat screen TV, video camera or stereo, etc. There is no black and white when it comes to manager bonus programs. 

TRAINING YOUR NEW MANAGER

Now that you have hired your new manager and wages and bonuses are in place, it's time for orientation and training. If you don’t have a clear and concise policies and procedures manual, then you need to design or purchase one, or several, that are available today and customize them to suit your company’s philosophy. (You can even purchase one from TSSA.) Review the manual with the manager.  Discuss job duties and responsibilities.  Be sure to cover company policies and procedures, sales and marketing, daily operations, company forms, rental agreements, chain of command, etc.  Make sure you are both on the same page.

It doesn’t matter if a manager has been in this business for 25 years or this is their first trek into the industry, all management staff needs to be trained, and in some cases, re-trained. Just because a manager has years of experience does not mean they are doing things the way they should be done, or how you want them done. Training is an essential part of your success in this competitive business. Remember, it’s the little things that will set your staff apart from the competition.

If possible, before the new management staff sets foot on the property for their first day, you should set up a week’s worth of training at your corporate office (if you have one). You both need to give each other your undivided attention in this training session. If you have relief staff in place, then have them run the office during your training sessions with new managers. Obviously, an experienced management staff will have more understanding of the operations of a self-storage facility than someone who has never managed a facility.

When it comes to training, please don't ignore your relief staff and leave it up to your site managers to train them. Yes, they can train the relief staff in the mundane day-to-day duties such as taking a payment or doing a move-in and move-out, but relief staff traditionally have been thought of as someone who will "hold down the fort" while the manager has their day off, but relief staff, if trained properly, can be a ready source of management staff ready to move up when you acquire or build your next project.

Things change rapidly in our industry, new lien laws, new ways to market through social media, call centers, etc. Your managers need to have "refresher" courses to keep up with changes. Get them a subscription to industry magazines. Send them to TSSA classes, seminars and conferences. Give them the tools to be successful.

If you show your appreciation and support by paying them well, rewarding them with obtainable bonus programs, patting them on the back for a job well done, or sending a hand written "thank you for your hard work" note, those things go a long way in showing your appreciation for your manager as part of your team. After all, they ARE your operations manager, and without them you could not be successful. Good management is the key to success!

 

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Management is Key

Preparing to Use Your New TSSA Rental Agreement 

by Kristy Breaux, TSSA Deputy Executive Director

One of the most important benefits of membership in TSSA is the right to use the renowned TSSA Rental Agreement. Having a basic understanding of the contract’s terms, as well as the decisions you as the business owner must make, is a great place to start. With this blog, we will focus on Page 1 of the lease, which includes all the items that are not simply defaults (in other words, things that will need to be filled in at the time of rental or decided in advance.) 

The TSSA Rental Agreement is a lease contract between you and the tenant outlining all fees and responsibilities. The agreement informs the tenant of your policies and protects you from damages, lack of payment, or other circumstance that may arise. If this is your first time using the printed TSSA Rental Agreement (or e-Lease if using electronically), this guide will help you get started. For a more detailed look at the terms of the lease you can read this blog or watch this short video
 
The first section, Tenant Information, collects the contact information for the tenant. The customer will need to identify who should have access to enter the unit and who should be notified in case of emergency.  That can be the same person or two different people. It’s important to note that the emergency contact (unless named as having access rights) is not authorized to enter the unit unless there is legal reason for such. Additionally, anyone listed as authorized to enter the unit may be given account information. If the person listed as authorized to enter does not have a key, facility staff may assist by cutting the lock. It’s helpful to explain these things to the tenant during the lease process. In either case, neither the person with access rights nor the emergency contact have a financial responsibility. This falls solely on the tenant listed.  

TSSA recommends that only one person or business be listed on Line 1. Spouses or significant others can be listed as having access rights. That way, you are only obligated to deal with one tenant, who makes all decisions regarding the contract.  

 

Paragraph 2 asks the important question about military service. (Special rules apply to foreclosures and evictions of military personnel because of the federal Servicemembers Civil Relief Act, so you need this answer.) Form ADD-4 may be used as an addendum for lease agreements with service members.  

This paragraph also explains the tenant’s obligation to keep information updated. If the tenant moves or is unreachable, the burden is on them to make you aware of current contact information so that any communication you send reaches them. 
 


Paragraph 3 is the space commitment. The minimum lease term is the minimum number of months the tenant is obligated to the terms of the contract. Most members use a default of one month, but you can use a longer minimum if your customer agrees to it. After that initial period, the tenant leases from you on a month-to-month basis. The obligation to pay rent stays in place until the tenant provides a 10-day move-out notice as outlined in paragraph 9 of the lease. 

You can use forms ADD-10 or ADD-11 if the tenant is storing a vehicle, boat, or RV, in addition to renting the unit. Or, TSSA does offer a rental agreement specifically designed for storage of vehicle, boat, trailer or RV when the tenant is renting a parking space or enclosure rather than a regular self-storage unit.  If your facility offers exclusively boat and RV storage, you’ll want to consider using the Vehicle, Boat and Trailer Rental Agreement.  

 

Paragraph 4 details the rental rates, late fees, and all charges for non-compliance. While the rental rate may change based on the unit size (if you offer a variety of unit sizes or amenities), the remainder of the fees are generally the same for all tenants.  Checking to see what neighboring facilities are specifying for each of these charges is usually a good place to start. Things like charges for the newspaper ads you must run in the event of a foreclosure requires a little research on your part, as you’ll want to cover your costs. Only fees outlined in the contract and accepted as terms by the tenant may be charged, so it’s always better to have these dollar amounts filled in, even if you don’t intend to charge them on a regular basis. There is not a guideline on setting these rates, but we can help you understand each line item so you can make an informed decision. 

A. This is the dollar amount the tenant is expected to pay in rent each month until the tenant notifies you of move-out and vacates the space. 

B. What date is the rent due? Some facilities have all customers pay rent on the 1st of the month while others use the anniversary date of the tenant’s move-in and collect rent throughout the month. The 1st of the month is the most common due date. Be sure to check your management software for your options on rental due dates. 

C. This is the date and the amount charged if the rent is not received. You will need to decide if you will give a grace period and then choose either a date or number of days. For instance, on the 5th of the month a late fee will apply, or 4 days after the 1st a late fee will apply. If you are using the e-Lease, it may be helpful to see what your management software offers as default process for late fees. Some require a specific day of the month and some use a sequential number of days before a late fee kicks in. 

D. In the same format as above, complete this if you will charge a second late fee if rent remains unpaid. 

When determining what fee, if any, to charge for E through O you will have to decide what pass-through costs may apply—staff time, and other required resources, etc. PLEASE NOTE: You do not have to apply a fee to these specific line items, but if you choose not to, you cannot charge the tenant later for these specifics.  If you never intend to charge a fee for an item, you should indicate $0 as to not have any empty blanks on the agreement.



Paragraph 5, Payments and Notices, allows you to indicate what payment methods—cash, check, or credit card—you will or will not accept.  Please note that you can change the method of acceptable payment in the future after giving notice to the tenant. 



Paragraph 6, Special Provisions, allows you to add any pertinent facility rules that may not be addressed in the lease. This may be guidelines for parking, notice of a required lock type, gate access rules, etc. 



If you have a lengthy list of rules, you will want to consider using an addendum, indicating that rules addendum in Paragraph 7. 

Paragraph 7 is the place you’ll indicate any addendum you use on an ongoing basis.  If you generate a particular addendum with every lease, you can have this hard-coded into your e-Lease so this remains checked and ensures your facility manager has communicated this to your tenant. Some software programs will require the addendum to be sent to the tenant separately from the lease. In any case, if any addendum is checked on the lease, the tenant is signing off that they have received and agreed to the terms, so you need to provide the tenant those documents.



Signature block—To e-sign or not? 
Lastly, the signature block completes the agreement between the lessee and the lessor. If you are using the e-Lease you will need to understand how your management software processes the electronic signature. Some will have a fully integrated system with a digital signature option and others will generate a PDF that may require the tenant to insert a signature and send back to you for completion. 




If you have further questions on setting up your new TSSA Rental Agreement, please contact us at 512-374-9089 or elease@txssa.org. 

Additional Resources:

Blog: Lease Essentials

Video: Rental Agreement Overview   

Additional Forms and Addenda (Requires Membership Log In)

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Preparing-to-Use-Your-New-TSSA-Rental-Agreement