Day 91: How to Deal with Problem Self Storage Tenants Without Losing Sleep

Hey folks, welcome to day 91 of the Storage 100 series. I'm Joe Downs with the Storage Moguls, and we're kicking off section 7 today, as promised last night. So over the next 2 weeks, the videos I'm gonna drop are gonna be on topics about tenants and growing revenue, a little revenue optimization, but we gotta deal with some tenants along the way too. So today we'll start with the human side, problem tenants, because you can't optimize revenue if you're losing sleep over one unit. Or you got tenants thwarting you, your progress at every turn. So if you want systems and frameworks for every operational challenge, go ahead, join the Storage Moguls community for free at storage moguls.ai. Storage moguls.ai, because at storage moguls.ai, we are an AI-powered learning platform with GPT tools and multimodal learning content across all storage verticals. You can start for free and level up at your own pace. And bonus, First 500 to register get our free Deal Analyzer GPT, but you have to register. All right. Dealing with problem tenants. Today, we'll explore how to manage these situations effectively without letting them take over your business or your life. It's all about setting boundaries and having clear strategies. So let's dive into understanding the impact these tenants have. Now, the reality is this small percentage of your tenants Will cause the vast majority of your headaches. This is the classic 80/20 rule, and once again, it's not just theory; it's a consistent pattern in self-storage. These problem tenants consume disproportional amounts of your time and energy. They rarely pay in time, and the stress they create just isn't worth it. So understanding this rule helps us focus our efforts where they'll make the biggest difference. So let's break down who these problem tenants actually are, because we can. Typically categorize problem tenants into 3 main types. First, you got the chronic late payer who eventually pays but always incurs late fees, which is a good and a bad thing depending on how much and how you manage your collection process. Then there's the constant complainer who's never satisfied, always finding fault. And then finally, we deal with the rule breaker who violates lease terms and creates liability. So recognizing these types is the first step to effective management. So let's start by looking at how to handle the chronic late payers first. Because while chronic late payers can be frustrating, there's a clear path to managing them. If, if a tenant is late 3 months in a row, it's time for a direct conversation if you haven't had one. So set clear expectations. Late means a late fee from day 1 with almost no exceptions, very little to no negotiation. Worst case, as covered earlier, a one-time waiver. If they can't consistently pay on time, they're simply not the right customer for your business. This firm approach protects your revenue and your time. All right, now to the constant complainers who can definitely drain your energy, but you can manage them with a simple process too. First, listen to their concern. Listen to it once and acknowledge it. If it's reasonable, provide a solution. However, if the complaints continue, you should probably set clear boundaries. Use a direct script. Look, we've addressed this. If you're unhappy, we can help you find another facility. This approach ensures you're not endlessly catering to unreasonable demands while still looking professional at the same time. All right. Now about those rule breakers. This is a critical area for any storage owner. When a tenant stores prohibited items, You have to act immediately. This isn't something you can let slide. First, inspect the unit. Make sure you get proper notice, 24 to 48 hours before you go in. Then issue a written warning. They need to remove those items within 7 days or they have to vacate. If they don't comply, start the lien process right away. Don't hesitate. All right. This leads us, though, to a bigger question. When do you decide if it's time for a tenant to go? That's a tough decision, but sometimes it's necessary for your business and your peace of mind. If a tenant threatens you or your staff, that's a, that's a hard stop right there. It's immediate exit. There's no room for that kind of behavior. Repeated property damage. Another good one. Another clear sign it's time to go. You can't let them destroy your property. Being 3 months late on rent starts to be a deal breaker. You're running a business, not a charity. If they make other tenants feel uncomfortable, that impacts your entire community. They got to go. You need to protect your good tenants. When you've decided it's time, let's talk about how you have that conversation because having the conversation can be intimidating, but being prepared with a script helps. Keeps you on track, keeps you professional, especially if you role-play the expected objections. So, you'll say, look, we've noticed the list of blah, blah, blah, blah, blah, whatever the thing is, the issue. This isn't working for us either. You want to be direct and clear, and then you want to follow up with, we need to ABC XYZ, or we'll need to ask you to find another facility. This sets the expectation. Again, it's— you want to be— you want to stay calm, professional, firm, but your demeanor is key here. Most tenants will either comply or leave. Both outcomes are a win for you. You either get a complaint or compliant tenant, or you free up a unit. All right. You got this, especially if you're prepared. And AI can prepare you. Just ask it, give it the context, explain the situation. If you're not sure, you can listen to my other podcast, Successful Idiots. Successful Idiots is a great podcast for this type of thing. We cover all these issues and how to use AI. So use AI, prepare yourself. All right, closing thought for the day: problem tenants are simply not worth the stress. Your mental health and business stability are paramount. So you got to set clear boundaries, enforce your policies consistently. Don't be afraid to let somebody go. Do it professionally, but just tell them, hey, it's not you, it's me. Sometimes letting go of a problem is the best thing for your business. All right. Next up tomorrow, day 92, all about maintenance schedules, and we'll cover what breaks and when. Please like this video if you found— or if you have a problem tenant. And they've ever ruined your day, you're not alone. So if you're a storage facility owner, you've been down this road before, like it. Also subscribe so you never compromise your peace. Get the insights regularly. Don't miss the lives like last night and when we have awesome industry guests like the Blonks. Now, if you're really leaning into this business and not just a voyeur, go ahead and share this with your network. Show them that you're a storage mogul. This builds your reputation. You're going to want that reputation later. And remember, problem tenants are inevitable in this business. How you handle them is optional. Systems beat stress every time. And if you're looking for a safe space and a community that talks about all these types of topics all the time, join Storage Moguls for free. storagemoguls.ai. And remember, the first 500 to join get a free GPT we built and use for quick deal analysis. Don't Being number 501 just because you waited thinking that guy will never get 500 people. Oh yes, we will. Register now. It only takes a moment to lock in your seat and get a free GPT. See you tomorrow.