Self Storage- Autopay only?

[Henry Clark]

Responding to a question that popped up.  We have two approaches to autopay depending on market size.

a. Small markets, we offer cash or autopay. All of our locations are at high occupancy rates. We have then started culling customers. If you are consistently late, we "require" you to move to autopay or move out. If you don't move to autopay and don't move out, we then raise your rent significantly.  We did not go to 100% autopay in small markets, since we do not believe you can be that selective with a smaller customer base.

b. Large markets, we started off autopay only. Although we want to fill our new units up quickly, we do not want to invest a lot of time into the business doing collection calls; which occurs when you start a new location for about the first 3 years. This also is a culling process that occurs up front. Most of our issues have been with Cash customers. This market is underserved, so we will get the occupancy rate up, might take just a little while longer.

We are at 66% autopay in our small market options and our customer base (no late payments and auctions) has significantly improved in the last two years since we did "a" above.

Large market we are at about 95% autopay. Some people move in and can't keep up their autopay, but until we are at a high occupancy, we are not ready to kick them out.

The main reason we have moved more towards cashless, is as we have grown as a "Self Service" model; we have to be as efficient as possible, otherwise we can't take on the extra business.