As we all have realized, the recent recession has left much of the country financially crippled. And with that, the rate of foreclosures has risen, especially in Florida and Michigan. Florida self storage companies are now feeling the force of foreclosures as people are downsizing and needing storage space. But the good is sometimes followed by the bad. People, specifically in hard-hit southwest Florida, are finding it hard to pay the bills for their self storage units.
The foreclosure crisis in southwest Florida has brought increased demand for storage space, but unfortunately some problems followed. Bill Bell, manager of U.S. 41 Self Storage in North Fort Myers said many of his customers are facing financial hardships that he has had to make some concessions for.
“We know people are having a tough time right now, but we are doing all we can to work with them,” Bell said. “If people are falling behind, we sit down and negotiate with them to work out some deal that will work for them.”
Self storage operators and especially their customers do not want to see a storage unit go to auction due to unpaid bills. It is wise for the self storage owner to try and keep a paying customer rather than make a few bucks at auction. The lien laws for self storage in Florida require weeks of posted and published notices, along with registered letters of notification to the customer. The entire process could last two to three months before a customer’s belongings are auctioned off.
One in 10 customers is behind on payments at Community Self Storage in Cape Coral, FL, said assistant manager Lisa Strong. The process she uses to remind and encourage people to pay their bills regularly is to make phone calls every day. She said she would work with them if they can only make partial payments in order to avoid auction. Self storage operators are doing everything they can to keep their customers. And they try and keep in mind that many customers who are having trouble paying have also just gone through the trauma of their house being foreclosed on.
“I don’t know anyone around here who is just doing the minimum notifications,” Strong said. “The last thing we want to do is sell someone’s belongings after they have been through foreclosure.”
Strong, herself, knows how a foreclosure can sting. The Community Self Storage property went through foreclosure earlier last year, she said. It was purchased by a Denver, Colo., real estate investment group which now operates the company.
According to Tom Dietz, spokesman for the Virginia-based Self Storage Association, the industry’s challenges have varied by regions across the country. The areas with high foreclosure rates have been impacted the most, but overall throughout the country the self storage industry has remained strong with customers paying on time.
“We haven’t seen a dramatic uptick in people being delinquent,” Dietz said. “We have seen a slight increase in the number of auctions, but it hasn’t been a pandemic.”
Sources Used:
“The Road to Maturity: An Overview of Self-Storage Supply, Performance, Investment and Recovery.” Inside Self-Storage. Jan. 2011.
Engstrom, Tim. “Storage Firms Face Challenges.” News-press.com. Dec. 24, 2010.