If you rent a storage unit, you may have noticed that your rent keeps going up. The company puts a high priority on business storage, and offers month-to-month rentals that offer a lot of flexibility for their commercial clients. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. The claim was resolved with the company paying $140,000 in penalties and fines. No, its not. Depending on your software provider, you may have a program that will assist you in the review process. And because not all sizes will necessarily be available at all locations it may be worth expanding your search just to be sure you get the perfect fit. Still, if I buy an income stock with no dividend increases and a current yield that falls below 2%, I'm probably looking to sell. To reach him, call 804.435.1605; e-mail [emailprotected]; visit These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Specialty large boat storage units are not available at every location, but small watercraft can be stored in non-specialty units regardless of where you're renting. If one customer who pays $90 a month moves out, you still net $10. Your items will be insured against accidental circumstances like fire, flood, or burglary, though read through the policy carefully to see what's not covered. What's Behind Rising Storage Unit Rent? The I-Team Investigates I used to hold the preferred. At Extra Space Storage, these features include: Save money on your Extra Space Storage booking by reserving your storage unit online instead of booking over the phone or in person. And thats simply not good enough in light of, well, everything. An intentionally fully-dispersed, but fully connected culture that works. Instead, use it as a foundation on which to build your own personalized message. I have no business relationship with any company whose stock is mentioned in this article. If youre not happy with how a storage company is treating you, grab your stuff and take it elsewhere. He recommended I check with the state Public Utilities Commission, which until 2018 regulated movers. And don't forget, Public Storage has hardly any day-to-day costs. Raising rents is often a managers least favorite task, but a necessity to stay competitive and profitable. Promotions and Offers. Dont let rate increases ruin the fun you have running your storage facility. I have no business relationship with any company whose stock is mentioned in this article. Despite headwinds due to Covid, Public Storage CEO Joseph Russell told analysts in November that a robust housing market, employees working from home and a move out of pricey urban markets were beginning to help boost demand. I just didn't know how much the increase would be. It's a very low cost business but one where you can raise prices quickly. Under California law, a self-storage company, such as this one in Glendale, can raise rates by as much as 10% during a state of emergency. All rights reserved. From time to time, we adjust our customers' rental rates to keep up with the rising costs associated with providing top-notch . While these types of guides are extremely helpful, they can also be overwhelming if youre not accustomed to using them. However there's a loop hool. Business owners are not happy. Give them at least one month to budget for the new expense and gently remind them of the new rent with a friendly text or email a few days before rent is due. If you rent a storage unit, you may have noticed that your rent keeps going up. I sold shares of self-storage REIT Public Storage (NYSE:PSA) out of my IMF portfolio in April. Some storage facilities raise their rates every year while others only raise them every few years. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Public Storage Dividend Yield 2023, Date & History (NYSE:PSA) NYSE:PSA Public Storage (PSA) Dividend Yield, Date & History $292.99 +1.11 (+0.38%) (As of 07/3/2023 ET) Compare Today's Range $289.57 $294.73 50-Day Range $280.06 $300.01 52-Week Range $270.13 $357.13 Volume 363,880 shs Average Volume 1.03 million shs Market Capitalization And then, over the past 18 months, the stock suddenly doubled. His background includes experience as a self-storage manager and district manager for a large management company. Making Small Changes to the Self-Storage Rental Agreement: Legal Establishing a Self-Storage Stimulus Plan for Tenants. He says he told Public Storage that he cant afford it, but they wont help. If you need a temporary place to store a vehicle, then you're in luck. How Often Does Public Storage Raise Rates - All Animals Guide You must provide either a 10-day verbal notice or 15-day written notice, and you must fill out a vacate card on move out day. These include Extra Space, Life Storage, Cubesmart, U-Haul and Public Storage. Always greet your customers with open ears and a smile on your face, and think of ways to show your customers why youre worth the rent increase. In our research, we found many slight variations in the dimensions of units, including units as small as 3 x 3 ft. You can also find storage lockers at many locations, which are good for storing small items and collections. Meanwhile, any car that you'd be comfortable having sit in your driveway will probably do just fine in a basic covered spot or an uncovered parking space in an open lot. Increases your leads. Excellent cap gains Ian. But this action demonstrated the seriousness of the government's potential enforcement efforts relating to these claims and the precedent that these laws will also include self-storage businesses. The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It will be difficult for you to justify to a long-term customer why hes paying more than someone who walks in off the street and rents the same unit. As for the disadvantages, Extra Space Storage is unlikely to be your cheapest option for medium and large storage units, nor is your price guaranteed month after month. The Inland Empire, in particular, saw storage rates hit historical highs in December as people fled the Los Angeles metropolitan area for regions deemed safer or more affordable, according to the report. Boost Facility Revenue By Optimizing Storage Rental Rates. But they had no place to put it all, so they started renting space. how / how often do you keep track of street rates. Smollins rent started at $108 a month, and 3 years later, its gone up more than 70% to $192. It has been even worse for STOR which is down ~25% **and** STOR has significantly increased its dividend every year!! The very simple answer is that Public Storage is a REIT. It is recommended that landlords increase rent by a "reasonable" amount (e. fossil wear os 3 update. /*! First consider the incident of a price increase. A Google search will reveal dozens of choices in L.A. tldr, our Public Storage rate got jacked up from $58 to $99. This means, of course, that not everyones rent needs to increase by the same amount or the same percentage. All new tenants will get an increase 5 months after moving in. Do we think FFO is going to keep rocketing straight up to $20 now, and thus enough to back up a $400 valuation? So, I was kind of expecting it. Plan a charity eventor host a fun, on-site event of some kind (like a barbecue or wine tasting!) First, youll need to iron out all the nitty gritty details when to increase and by how much,which tenants rates to increase,how to inform the tenants,how to handle the potential flood of complaints, and of course how to maintain your sanity while politely responding to any furious phone calls. What is the best part of working at the company? Just tell them the dollar amount of the increase. Many of these laws charge penalties for charging unconscionable prices or for more than acceptable market prices or even simply at higher costs than they were immediately prior to the declaration, which could mean practically anything from the perspective of an alleged aggrieved customer. I like the idea of making PSA one of the two just because it is so well run, but I did not know they have been so stingy in holding back dividend increases. We can help. I am not receiving compensation for it (other than from Seeking Alpha). Your 40s and 50s: Managing Health Changes. Sometimes customers forget their gate codes and unit numbers, and they also forget how much theyre paying every month. top 15 holdings in that portfolio and was my largest REIT holding for the past few years. When considering increases, be fair, be consistent and stay within your comfort level. Likewise, even within the same locations, prices varied heavily from facility to facilitysometimes by as much as several hundred dollars. Storable websites attract more leads, convert more tenants and integrate seamlessly with Storable Software. He represents self-storage owners and managers throughout the country on legal matters including property development, facility construction, lease preparation, employment policies and tenant-claims defense. The Section 396 protections will remain in effect until at least March 4, she said. By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. The exact fee varies as it is based on state and local self-storage laws. Like movers, self-storage companies appear to be enjoying boom times as many people seek places to stash possessions because of changes of address, downsizing or the death of a loved one. "then sell at $25 when we're in a recession again". In 2022, the supply of new self-storage space in the United . Before initiating your next round of increases, consider these important factors. The advice we give consumers is to shop around and research. Then filter your search by storage type and size to find exactly what you're looking for. Carolyn Johnson reports Aug. 2, 2022. But that doesnt matter, said Smollin. Thats because the industry isnt regulated; no ones watching what goes on, so they raise rents because they can. I think the market just cares about FFO multiple. Let's go through it. Is it designed to be stored at a certain temperature (for example, wine or artwork)? This company has the most preferreds. There is not a regulation on increasing the rent. Privacy Policy. WhyGNC filed for bankruptcy protection despite vitamin sales boom. Furthermore, your district manager or owner may limit your access to those capabilities, perhaps because increases are handled at the corporate level. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Does Extra Space Storage have 24 hour access? Keep your listed available units up-to-date, accurate and filled. She is particularly interested in topics around organization, home design, and real estate, and definitely has a few tricks up her sleeve after moving eight times in eight years during her 20s. As this COVID-19 crisis continues, self-storage operators must be aware of their state law restrictions and be conscious of any price increases that either exceed their state limits or could be perceived as excessive based on current pricing. formId: "0f908cb9-4177-4762-bc31-16afefcf4999" Dont remind them! Enhanced security measures that you will find at some Extra Space Storage locations include: Don't forget that you will need to supply your own lock for your unit. On the other hand, youre in business to make money. That's almost $500 a year. What caused me to go from having Public Storage as my largest REIT holding to having no ownership whatsoever? It is basically a legal form of bait and switch. The company's FFO growth seriously trailed off in 2017, essentially going flat through 2021: Now, FFO has skyrocketed. Whiteheads stuff is at the companys Hawthorne site. His Ian's Insider Corner service provides live chat, model portfolios, full access and updates to his "IMF" portfolio, along with a weekly newsletter which expands on these topics. So it's worth revisiting the name and why I've gone from having a big position in the company to not owning it at all. If you raise everyones rent by, for example, 7% each year theyre at your facility, the increase wont catch them by surprise and youll be better able to integrate your projected earnings from your price increase into your budget. Registered in England and Wales. Discover new ways to power your self-storage business. I had to liquidate things I couldn't afford to store, so I rented the smallest unit that I could, said Smollin. For that reason, Whitehead said, shell pay the higher price to store her stepdads belongings, at least until shes in a more settled frame of mind. region: "na1", Call today at 800-688-8057 for a free reservation and get your first month's rent for just $1. 81 people answered. Is there anything I can do to get Cubesmart to stop raising my rent Third-party services that integrate seamlessly with our software. The company has more than $5 billion of land on its balance sheet, and that figure is calculated at cost. They offer both outdoor and covered units for large watercraft storage, as well as indoor drive up units for smaller watercraft that you want to keep totally protected from outdoor elements like sun, heat, cold, and rain. But theyre raising rents.. It's basically a scam, and the government refuses to crack down on it. The dimensions at your location may vary. You may be denied access to your unit until it is paid in full along with your rent. Guidelines for Self-Storage Rent Increases: Frequency, Amount and Notifying Tenants, Making Small Changes to the Self-Storage Rental Agreement: Legal, Pacing Price Increases: Owners Best Friend, Managers. Classic and vintage cars are usually best stored in enclosed units that keep out all of the elements. Any recommendations? Copyright 2023 NBCUniversal Media, LLC. Reddit and its partners use cookies and similar technologies to provide you with a better experience. I own rental properties and Im not raising rents because of COVID. Small (5 x 5 ft, 5 x 10 ft, or 5 x 15 ft), Large (10 x 20 ft, 10 x 25 ft, or 10 x 30 ft), Vehicle Storage (large, outdoor uncovered), Dorm room, studio apartment, or one-bedroom apartment. The I-Team wanted to talk with Public Storage about the complaints weve received, but the company didnt return our repeated phone calls. (r=(t=s[n]).getAttribute("data-secret")))r=Math.random().toString(36).substr(2,10),t.src+="#?secret="+r,t.setAttribute("data-secret",r);if(a||i)(e=t.cloneNode(!0)).removeAttribute("security"),t.parentNode.replaceChild(e,t);t.contentWindow.postMessage({message:"ready",secret:r},"*")}}}}(window,document); Step one in dealing with complaints: Expect complaints. Everyone has a different customer base, a different management style, and a different relationship with their tenants. These cookies track visitors across websites and collect information to provide customized ads. I/we have a beneficial long position in the shares of AMT either through stock ownership, options, or other derivatives. All promotions and offers are subject to change. It also issued refunds to its customers and additional courtesy credits. If so, how can dividend remain unchanged when FFO has increased significantly? Just about every self-storage operator has endured a heated discussion with an upset tenant, and the pandemic has certainly fueled the fire, it says. According to the contract, they can increase the monthly fees anytime that they feel like it. The easiest way to organize a price increase is to make it part of the yearly schedule. Guidelines for Self-Storage Rent Increases: Frequency, Amount and Are Public Storage rental units on a month to month basis? Remember the impact of curb appeal. As noted above, PSA stock was available at or around 20x FFO on various occasions in recent years. But it sure sounds like some customers are very unhappy, and Im guessing rate hikes during these difficult times might have something to do with it. How often do you get pay raises at Public Storage? This thread is archived New comments cannot be posted and votes cannot be cast 12 32 Related Topics San Francisco San Francisco County California United States of America North America Place 32 comments Best If you havent been doing regular rent increases, the first one will be most jarring to your long-term renters. People will always come in and say they can get a better deal from the storage facility down the road, but can they really? Instead, choose a small, locally operated storage company with transparent pricing. I think I got about 15 days notice. Thousands of locations across 40 U.S. states and Washington D.C. No guaranteed rents so price may increase over extent of lease, Mandatory Insurance, $11 to $47 (per month), Wood, wicker, metal, leather, or upholstered furniture, Certain media (vinyl records, DVDs, VHS tapes), Lace or leather clothing, as well as clothing stored in garment bags, Collectibles (comic books, stamps, coins, etc.). While that was likely only one small part of the various cost increases that led to your decision to increase rent prices, it is the easiest for the customer to accept. Public Storage was paying me a 4% dividend on my $200 cost basis. For example, under California Penal Code Section 396, upon proclamation of a state of emergency and for a period of 30 days following that proclamation, its unlawful for a person, contractor, business or other entity to sell or offer to sell any storage services for a price more than 10 percent greater than the price charged by that person for those goods or services immediately prior to the declaration. In fact, renting a portable more, First time renting a storage unit? Thats just crazy, she said. Looking for a helping hand in the market? As always, we recommend doing your research before renting a storage unit, comparing the individual features and amenities available at your nearest location and comparing Extra Space Storage prices, availability, and more to at least two other storage providers. Not really interested unless it drops considerably below 300. Is the pay weekly or biweekly? | Public Storage | Indeed.com We plugged in a few numbers and found an average price of $100 per month for a small unit, $173 per month for a medium unit, and $321.50 per month for a large unit. The market value of that land is likely much higher. Professionals Movers or Moving Containers? There are also some additional fees to factor into Extra Space Storage prices: Any time that you rent a self-storage unit you can expect to see variations in price based on what features you choose. There should be a limit in increase such as apartments 10%. This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. That's right, I owned the stock for five years (since 2017) and got precisely zero dividend hikes from the company during my ownership. There's also the dividend. Copyright 20042023 Yelp Inc. Yelp, , and related marks are registered trademarks of Yelp. Public Storage, from time to time, can close storage properties and sell off the underlying land to developers for huge mark-ups. Meanwhile, the stock price had doubled between 2016 and April 2022. With everyone getting used to inflation, this is a perfect time for a company like PSA to stick folks with big price increases. The answer to this question depends on the storage facility. It's been buying land and building storage units within American cities and metropolitan areas for decades now. The point is, if youre going to do an increase, consider the benefit of going larger. This is a great option for storing items between moves, since wide aisles and large size storage units enable you to pull a moving truck right up to your unit. "Typically, the rate can be 10-15 percent on average," says Hanson. He appears daily on KTLA-TV Channel 5. Whitehead, 58, moved her stepfathers belongings into a self-storage facility in Hawthorne costing $165 a month. Managing self-storage rental rates is a delicate endeavor, and even more so during a crisis such as the coronavirus pandemic. I'd argue this stuff was all in the price as it topped $400 per share last month. My first piece of advice is for state lawmakers. Still, I'm not particularly interested in REITs whose yields fall below the 2% mark. Copyright 2023 Storable. Extra Space Storage reservations are no obligation and are free to make. The good news: Your tenants probably already understand this concept, too. When rolling out price increases to tenants at your facility, you can sort tenants into more than just unit and price groups using tenant logic: Your rate increase should be high enough to make up for lost tenants due to rate increases. But consistent rental rate increases are a necessary part of a successful self storage business model. Even if its a small change, curb appeal is huge. The key is finding the perfect balance. Another big factor is the type of vehicle storage that you rent, with three options to choose from based on your needs: Uncovered storage (least expensive) Parking spaces in open-air, fenced-in lots. Here's what to know about Extra Storage Space prices, locations, unit sizes, amenities, and more so that you can decide on your own whether you should rent your next storage unit with the company. A spokesman for the California Department of Consumer Affairs, which oversees moving companies, says it doesnt monitor the self-storage business. For your facility, raising rates for all tenants once per year might be just perfect. I am grateful to all those who post publicly about this shady business. Informa Markets, a trading division of Informa PLC. Scott I. Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster Morochnik & Garber P.C. The owners have raised the rent 3 times since April 2019. There's more to Extra Space Storage than just basic storage units. Finally, as I've frequently pointed out, Public Storage is funded in large part by preferred stocks issued at 4% yields which never mature. The company I'm looking at renting from (Public Storage) is advertising first months rent at $1 ($8 monthly) on a 5x5 unit. We organize your move tasks, tips and reminders.Sign Up. Use tenant logic to predict the loss of tenants and control what you can to ensure for a successful rate increase. This cookie is set by GDPR Cookie Consent plugin. Public Storage Dividend Yield 2023, Date & History (NYSE:PSA) - MarketBeat No. The cookie is used to store the user consent for the cookies in the category "Performance". Korey Hanson, president of Argus Professional Storage Management in Tucson, Arizona, says they raise rents typically in the first quarter. Much has been writtenby the self storage industry about rent increases, and each company handles them differently. The industrys only all-in-one, end-to-end facility management software. That's the brief answer. it can raise prices whenever it wants), Owns tons of prime land in American urban centers. If youre raising rent for ten customers all paying $50/month and you expect one tenant to leave because of the price increase, plan to make up the loss in the new revenue from your remaining nine tenants. Looking for self storage? Even if its not so close to where you live or your business is, you might find it might be economical for you to shop around and look at different units, he said. You also have the option to opt-out of these cookies. On the other hand, if you were to raise everyones rent by exactly 10%, the one with the large unit would be paying $15 more while the one with the small unit is paying just $3 more per month. So while you can cancel your storage lease at any time, you also don't have the protection of a locked in rate. 1. You should also be on the lookout for any special promotions or deals, since you may be able to get an additional discount if you book at just the right time. It was during one of these declared emergency periods that one large self-storage operator was accused of price gouging for raising rent after a series of state-wide wildfires. US Storage customers in practice experience one rate hike per year, Brady said. Public Storage was paying me a 4% dividend on my $200 cost basis. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. If one customer who pays $90 a month moves out, you still net $10. California Price-Gouging Protections Could Affect Self-Storage | Inside For a small unit, it may only be $10 more per month not an amount most people would scoff at or struggle to come up with. Extra Space Storage units can be cancelled by contacting the office manager at the facility you booked with. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. The lack of any dividend hikes, even a token one, for many years was a big turn off to me. Another common concern is how to approach customers who have multiple units. Consumers have been complaining to the I-Team about this for a few years now, saying the rent hikes are happening when they can least afford it. Got a confidential news tip? Your 60s and Up: Healthy Body, Sharp Mind. Sometimes I sell things from that portfolio without a full write-up explaining why. If you've been a sweet customer, say hi every day and don't fight or argue with them about the increase and just seemed genuinely concerned, I would offer that 35 percent off again.