The Fifth Rule of Thumb & Your Lease – Why you need a great lease

Managing your property doesn’t just mean managing your managers, your marketing, and your advertising. It also means making sure that you are managing your basics too. There are 4 things that you need to make sure you are managing well if you want to be successful. Today we are going to talk about managing your lease. If your lease is not concise, you may find it very difficult to manage a bad tenant. The last thing you want is to be stuck with a tenant that doesn’t pay rent.

Your lease is the best way to protect yourself. If you have a strong lease, you will clearly state what you are responsible for and what your renter can and more importantly cannot do in your storage facility. The lease also needs to explain when the rents are due, how they will be collected and what happens if they are not paid on time. This way there are not surprises if the rents are not paid on time. You want places for your renters to initial so that they can’t say that they didn’t know what the consequences would be if you have to lock a unit or even sell a unit.

When you have a strong lease, you will be better protected if anything happens to your property because of tenant negligence or if one of your tenants does something illegal. You want to make sure that you are not held liable too.

Whenever you take over a new property, you need to have every tenant sign your lease. You don’t know what the old lease had in it. You don’t know if it covered everything that your lease covers. In addition, having everyone come in and sign your lease gives you the opportunity to review your rules and introduce yourself. Finally, it allows you to make sure that everyone has renter’s insurance. You should always require your renters to have insurance to protect both of you.

When you design your lease, make sure that you have initials next to each section that may end up in court. For example, you want to make sure that they initial that they know they can only have up to a certain value of items in your units unless otherwise agreed to. You want them to initial that they know what happens if they don’t pay rent. You want them to initial that they know what the rules are. This way if you ever end up in court, you have a signed document to back you up.

There are a few things that you want to make sure that your lease contains. You want to prohibit foodstuffs. You don’t want to allow your tenants to store items that will attract rodents. The last thing you want is a mouse or rat problem. Once you have them, they are hard to get rid of and they will upset other tenants. If they leave reviews that you have a rodent problem, it may prevent future tenants from renting from you and it may affect your bottom line if a renter sues you for damage caused by animals.

You should also prohibit anything that is illegal. You don’t want anything that is combustible for obvious reasons. You don’t want anyone or anything living in your units. This can be a problem when you have climate controlled units with power.

For your own protection, you need to have a clause that allows you to access the unit for routine maintenance should the occasion arise or in case of an emergency. You don’t want to have a roof leak and be unable to access the problem because you can’t reach your tenant to get permission to enter. This also allows you to enter if you think they are breaking the rules or doing anything illegal.

Any time that you have to open a unit make sure that you document it. You need to have a witness film you opening the storage unit and showing everything that you did from the moment that you opened the door until you lock it again. Do not enter the unit. If you find a problem, call your tenant, and tell them to take care of the problem and give them an eviction date if they don’t fix it. If necessary, you can call the police instead.

Your lease is what keeps people from having garage bands in your facility. You don’t want noise complaints from the neighbors. You don’t want wild animals attracted to your facility because of food. If you can prevent a problem before it happens, you have already won. Have an attorney help you draft your lease and make sure that they are familiar with what needs to be in a self-storage facility rental contract. As always, happy investing.