The Fifth Rule of Thumb - Why you need a strong lease in self-storage!

Your lease is the best way to protect yourself. You need to have a tight lease that lists what you are and are not responsible for, what the renter can and cannot do in the property, and when the rents are due and what will happen if the rents are not paid. This way there are no surprises and the tenant cannot complain that they didn’t know.

When you take over a new facility, you should have everyone sign your lease. There are two advantages to this. Your tenants will meet you or your manager and you can say hello. Secondly, you have no idea what was in the prior owner’s lease. You don’t know if it covered everything in as much detail as your lease does. You have no idea if the prior lease protects you now that you have purchased the property. By having them come in, you can have them sign a lease that is in your name, with your rules and it gives you the opportunity to verify that they have renters’ insurance.

When you design your lease, make sure that you have your tenants initial the important sections. If they have to initial each rule, they can’t say that they didn’t know what the rules were. If they have to initial that they have tenant insurance, they can’t say that they didn’t know if there is a problem with their unit.

Always make sure that your lease prohibits any foodstuffs. You don’t want them to attract rodents or other pests. Once you have them, they can be hard to get rid of and they will upset other tenants as well as future tenants. It can affect your bottom line if a renter sues you for damage caused by animals. Your lease should also prohibit anything that is illegal, combustible, or alive from being kept in the unit. This is especially true in climate controlled units.

You also want to have a clause in the lease that allows you to access the unit for routine maintenance or in case of an emergency. This way if you suspect that they are doing something illegal or prohibited in their unit, you can open it to find out what is going on. IF you have to open a unit, make sure that you have a witness film what you did. Always look only from the doorway, on camera, so there is a record of what you did. If you find a problem, you can tell the renter to get whatever the problem is out of the unit, or you can evict them. Worst case scenario, you can call the police.

If you have a strong lease, you will be protected. You won’t have to worry about neighbors calling in the middle of the night complaining about a garage band making to much noise, or animals being attracted to one of your units. As always, happy investing.