Introducing The Self-Storage “Terminator”- Penny #2

Mezzanine Investing

In addition to having to not deal with the “repair” of a residential rental, self-storage ownership has another great bonus! The ease of eviction.

There are moments in the self-storage business that we all hate. But, I can GUARANTEE you one thing. Compared to the hassle of evicting a residential tenant, terminating the lease of a self-storage tenant is a walk in the park. There are still strict rule set to follow that do vary state by state, be sure to look up your state-specific laws so you are well versed in them!

Your reasoning for evicting a tenant will vary from non-payment, prohibited items being stored, misuse of the unit (i.e. Sleeping in it or running a business out of it.), or for just blatant disrespect to the property.

To set yourself up for the best possible outcome, it is imperative that you have a plan in place before you even have tenants. Making up an iron clad lease will ensure that all your exits are covered if you find yourself in a precarious situation. The things that you should pay attention to in the lease are rental fees, billing schedule, conduct expectations, and termination information and eviction policies. By making these lease expectations clear and concise, there will be no misinterpretation or confusion.

If you find yourself in a position where you need a tenant gone, begin with serving a termination notice that is written according to your lease. Depending on your state, this could be via mail, fax, or email. Now is when it really becomes important for you to know the state specific laws. If you don’t follow the laws specifically, you will be the one to lose out and your unruly tenant will win.

If you have gotten to know your tenants at all, you may already be anticipating what their reaction will be like. If you don’t know them, be prepared for any of the following reactions!

1.     Complacent and understanding. Maybe they are in a place in life right now where they are facing difficulties and saw it coming. This may lead them to packing up and taking their leave. If this is the case, jump for joy and do the happy dance! Your perils are over and you are free to move on in your business!

2.     Passive Aggressive. So long any sort of payment. Trash casually “accidentally” left by the unit. This will be somewhat time consuming and will result in having to over-lock the unit, defaulting, and auctioning the unit.

3.     Defiant protesting. This “make-me” attitude is the one that will land you right in court, unfortunately. It will also be most time consuming and costly.

An eviction can take 30 – 60 days in the courts. Lawyers are not always necessary as the cases will be relatively simple. If the tenant begins to try to argue as to why they shouldn’t be tossed out of the space, it would be wise to seek the assistance of an attorney.

No one likes to be the bad guy. Sometimes, though, it really is necessary. Short term it may seem like a long battle. The end game, though it to have a self-storage facility occupied by responsible, reliable, and happy tenants. Don’t let that one bad apple ruin your establishment.

Thank you for tuning into the second installment as to why self-storage is a “dime”. Next Wednesday is going to be a great one; “Attractive without the frills”. We will cover how your self-storage facility can be profitable without having to be pretty, and without sacrificing being attractive.

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