Why Should You Consistently Raise Rates on Your Self-Storage Facility?

When you are looking into a self-storage facility you need to consider the fact that you are going to be raising your rents on a regular basis. You may be building or buying in an area where the current owners haven’t raised their rates in 15-20 years. They have completely paid off their property and they are not worried about generating more income. As a result, they are potentially losing out on thousands of dollars in income each year.

You should raise the rents after your tenant has been in the unit for 6 months and again after they have been in the unit for an additional 9 months and then every 9 months after that. We are not talking about large rent increases. Then your tenants are likely to look around and see what else is out there. We are talking about increase that are so small they will hardly notice.

For example, if you have 200 units and your raise the rents by $6 at 6 months. That is a $1200 a month increase in income for you. That is an additional $10,800 until you raise them again in 9 months by another $6. This will give you another $1200 a month or an additional $21,600. For the next 9 months. That is a lot of income for such a small rate increase.

Very few tenants will move out of such a small increase. They don’t want to go to the trouble of moving their belongings. Now that we have talked about the overall income that you will generate, lets break it down even more. You don’t want to raise your entire self-storage facility at the same time. Instead, you want to raise 1/9th of your facility at a time. This means that you will have a rate increase every single month to 1/9th of the facility.

If you do a large rate increase, your tenants may actually think about what they are storing and realize that it isn’t actually worth what they are paying to store it. You don’t want that to happen. You want them to leave it where it is. The slower you raise the rents, the less likely they are to notice or think about what they are paying to store their belongings.

Raising the rates is one of the easiest ways to generate more income from your self-storage facility. Don’t be the facility that is dragging the market down. As always, happy investing.