Self Storage: What Percentage of Rents Did You Collect in April?

Question

OK self storage peeps. What percentage of rents did you collect in April? Do you collect quarterly or monthly? I'm assuming they are credit card auto-debits, please correct me if they are not.

Did you have any unusual cancellations? I know units come up from time to time, but did you see higher than average turnover? What are you anticipating for May?

Michael Wagner · Answer

Pretty much business as usual for us.  Collected 92.6% of rents due for April which is pretty standard for us.  We've seen an uptick in occupancy in April over March but that very well could just be the "spring uptick" that we see most every year.  Long story short, we haven't seen any negative consequences as a result of Corona.

59.2% of our customers are on auto credit card debit.  We collect about 3% via good old fashioned checks.  No cash, The rest come in as "manual" credit card or ACH payments online or over the phone.

My gut tells me that we MIGHT be less affected by our current circumstances than some. We intentionally invest in secondary and tertiary markets in areas with strong enough supply and demand numbers in an attempt to add us a bit of extra "insulation". I'm viewing this is a real good TEST of the strategies we've been using over the last 9 years or so.

Hope that helps some!

Nick Heil · Answer

Hey Mindy! I'm in portable self storage. I saw demand slow a little during this, but the majority of the units I had rented out stayed rented out and I'm still collecting mostly all rent! Some are on auto-pay, but others provide to log into my website and pay, and some people still prefer old fashioned check in the mail. I try to provide as many payment options as possible. My turnover has largely been unaffected, just renting less brand new units at the moment, but starting to pick up again. I'm anticipating May to continue picking up as a lot of people performing renovations like to use my portable units.

Nick Heil · Answer

Hey Gary, no PODs is not a franchise. They are a privately owned business (Actually owned by a Canadian pension fund). I got started from scratch with my own units and delivery system. There are a lot of different types of units and delivery systems out there so you have to do research and decide on which system is best for you and your particular area. There are some franchise opportunities out there for this business, but I wouldn't recommend that route. It's a simple enough business and concept that I don't think the franchise model is necessary, unless you really want to pay all the additional franchise fees!

Zach Quick · Answer

@Mindy Jensen No change in terms of collections. Collect monthly. Have 3 facilities at 75+% autopay. Have 3 between 55-62%. Move-outs have been more or less the same too.

A couple sites seemed to have slower street traffic for a couple weeks, but starting to pick up again now it seems.

I’m also in the middle of the map, so I’m sure some may have different results in different areas.

We have paused auctions and late fee’s for April so a little less revenue in terms of that this month, hope that helps.

George Fitz · Answer

Hi Mindy, we are seeing similar. We've had less move-outs but also less new rentals, so occupancy has been pretty similar to past years. Being Spring, we are seeing more move-in's than move-outs, but like I mentioned, the volume of both are down. Thus far, we haven't seen an increase in past due rent. We do monthly anniversary billing so it's a very up-to-date picture of things. As of April 29 our rent collections are actually 10.5% higher than the same period in 2019. I have rural properties, and not a lot of folks are on auto-pay. Around 38%. Around 61.5% of our customers pay by credit card or bank draft. The rest do checks and cash.

At this point, I do not anticipate a whole lot of change to these numbers. As I mentioned above, we're in rural markets and while I know there have been some layoffs in the towns where we're located, I don't think they are as deep as in more populated areas. Out of curiosity, I'd be interested in hearing how properties in larger cities are faring. I have heard that Public Storage occupancy is down, but I'm not sure if that is related to Covid-19 or just a result of increased competition.

Michael Wagner · Answer

Thought I'd add some data here for May.  Our rent collections are better than average so far this month...

Nick Heil · Answer

@Mindy Jensen lol, have you ever seen PODS? It’s a self storage container, only you can move them with the right equipment. Customers rent them month to month just like a traditional self storage unit only I can deliver the self storage unit right to their front door. If they want me to move them loaded I can do that too. Or, if a customer just wants to rent a portable container right at our location just like a traditional self storage unit they can do that too at cheaper rates. It’s the best of both worlds. I started in this instead of traditional self storage because you could start small. I started with 4 units and have over 80 units today.

Gary L Wallman · Answer

Nick,

Is PODS a franchise opportunity? How does one get started?

Gary

Nathan Gesner · Answer

I manage 200 storage units. Payments were pretty steady last month, no foreseeable difference.

Portable storage is when they deliver the storage pod to your location of choice. You use it as long as you want and then they pick it up when you're done. It's interesting because you would think it's a temporary thing. I know people that have rented 40' shipping containers "for a few months" and they're still sitting on their property after ten years.

It's ridiculous what people will pay to store their crap.

Mindy Jensen · Answer

What is portable self storage?