&

Let me tell you about the time I became the perfect case study for why rent increases actually work.

About six years ago, I rented a storage unit for $35 a month. Perfect little 5×10, just enough space for the furniture my in-laws didn’t want but we weren’t allowed to get rid of. Paid my bill on time every month, never thought twice about it.

Then Extra Space bought the property.

Within 18 months, my rent went from $35 to $60. Then $75. Then $85. That's a 143% increase in less than two years. I was furious every single time I got the notice. I'd pull up my phone, search for cheaper options, find a few places charging $50-60, and then... I'd do absolutely nothing.

Why? Because the thought of renting a U-Haul, spending my Saturday loading and unloading heavy wood furniture no one wanted but had to keep, driving across town, and dealing with a new gate code was infinitely more painful than just paying the extra $20 a month.

Extra Space knew exactly what they were doing. And here's the thing that still gets me: they were absolutely right.

Most operators treat rent increases like they're asking tenants to donate a kidney. They agonize over the timing, lose sleep over the amount, and brace for an exodus that almost never comes.

Meanwhile, the REITs are over here running their fancy algorithms and pushing rates like they're playing a video game. And you know what? The data shows they maintain around 80% retention during rent increases. That means four out of five people get the notice, grumble about it, and keep paying.

The dirty secret of self-storage is that nobody wants to move their stuff. Ever.

Think about the actual cost of moving: truck rental ($50-150), an entire Saturday of physical labor, the psychological anxiety of finding a new place, and doing all of this while you're probably already dealing with some life stress (divorce, moving, downsizing, death in the family). We did the math across our 600+ units—the total switching cost averages $150, which means tenants can rationally absorb a 20% increase before moving makes financial sense.

But here's where it gets interesting. The REITs figured out something most independent operators miss, and it's not about their billion-dollar pricing algorithms.

When we acquired our facilities, we noticed something fascinating in the data. Extra Space and Public Storage weren't just raising rents more often—they were training customers from the moment they walked in the door.

Here's their playbook: offer a move-in special (sometimes 50% off), then hit tenants with their first increase at month 3 or 4. Not a gentle bump—we're talking 8-12% jumps that bring them close to market rate. Then another increase 6-9 months later.

The genius isn't in the amount. It's in the timing.

Tenants who experience an increase in their first six months learn that storage isn't a fixed expense. You've trained them early that rates adjust, just like their apartment rent or car insurance. Wait 12-18 months for that first increase? Now you're breaking an expectation they've built, and suddenly that $10 bump feels like betrayal instead of business.

We started implementing this across our facilities. Every new tenant gets their first increase between month 5 and 7. Usually 10-12%. We lost some sleep over it the first time. Then we watched the data: 82% stayed. The exact same retention rate as our old 12-month schedule with smaller increases.

Turns out, if you're going to make someone uncomfortable, the timing matters way more than the amount.

Let's get tactical. If you're going to implement a disciplined rent increase program—and you absolutely should—here's how to think about it.

Who to target first:

Your delinquent and chronically late tenants are, counterintuitively, your least price-sensitive customers. They're already paying way more than your on-time tenants when you factor in late fees (often $30-50 extra per month), and they still haven't moved out. A $10 rent increase is noise compared to what they're already paying in penalties. We target this group first with 12-15% increases.

Upstairs and indoor units are stickier than drive-ups. The pain of moving stuff down stairs or through hallways creates friction that insulates you from price competition. Same principle with climate-controlled units—tenants storing valuable items demonstrate higher willingness to pay.

Long-term tenants (12+ months at the same rate) are due. They've gotten comfortable. But here's where we diverge from the REIT playbook: we cap increases at 8-10% for 2+ year tenants as a loyalty gesture. Why? Because losing them costs us more in community reputation than we gain in revenue. That's the mom-and-pop advantage—we actually know who Mrs. Chen is and that she refers customers.

When to raise:

The traditional wisdom says wait 9-12 months between increases. That's fine if you're playing it safe. But if you're at or above 90% occupancy, you're leaving money on the table.

We've tested more aggressive timelines—initial increase at 5-7 months, then every 9-12 months after that—and retention hasn't suffered. The key is consistency. When tenants know increases happen regularly, they factor it into their mental math and stop being shocked.

Also, timing matters seasonally. We push increases in January (who wants to move in 15-degree weather?) or July (try loading a truck in 95-degree heat). Seasonal friction is your friend.

How much:

Here's where most operators chicken out. The "safe" play is 3-5% annually. You'll retain nearly everyone, but you're crawling toward market rate.

If you're near full occupancy, you can push 10-12% on tenured tenants and still maintain 75-80% retention. Yes, you'll lose some people. But here's the math that matters: if you raise rates $10 across 100 units and lose 5 tenants, you're still netting an extra $950/month. And those empty units? You're filling them at the new, higher rate.

The break-even formula is simple: Break-Even % = Increase % ÷ (1 + Increase %).

For a 10% increase, you break even at 9% tenant loss. Industry data shows actual loss runs 5-10% for increases in the 10-12% range. The math works overwhelmingly in your favor.

Look, I'll give the REITs credit where it's due. They proved that regular, disciplined rent increases don't crater your business. Extra Space's CEO literally said their in-place rents are 74% higher than move-in rates. That's not happening by accident.

But here's what they get wrong: they optimize for the portfolio, not the property.

Their algorithms don't know that Unit 247 backs up to the dumpster and isn't worth the same as Unit 248 with the roll-up door. They don't know that Mr. Rodriguez has been a perfect tenant for three years and would absolutely refer his realtor friends if you treated him right.

You do.

When we analyzed our tenant base, we found our delinquent tenants could absorb 15% increases (they're already paying that in late fees), but our student tenants in small units were price-shopping constantly. The REITs apply uniform increases and accept the churn. We apply targeted increases and retain the relationships that matter.

That local knowledge—combined with the discipline to actually implement regular increases—is how you beat the REITs at their own game. They have the data. You have the context. Use it.

Here's where most operators fumble. They send a rent increase letter that reads like a hostage negotiation: "We regret to inform you..." or "Due to circumstances beyond our control..."

Stop apologizing.

Your letter should be straightforward: tenant name, unit number, current rate, new rate, increase amount, effective date (60 days out), brief reason (rising costs, facility improvements), and your gratitude. What to exclude? Never remind them what they've paid historically. Many tenants on autopay forget their rate, and showing them the cumulative total triggers loss aversion.

We send certified mail (legal protection), follow with email (immediate awareness), then text reminders at 30 days and 7 days out. The multi-channel approach ensures they can't claim ignorance.

Here's the critical part: empower your managers to negotiate. We give them authority to reduce increases by 50% or waive them entirely for 3-6 months for at-risk long-term tenants. Most tenants don't ask. But for the ones who do, having a manager say "Let me see what I can do" preserves the relationship.

The REITs route complaints to offshore call centers with rigid scripts. You've got managers who can make judgment calls on the spot. That's not a weakness—it's a competitive advantage.

Here's what I want you to do this week: Pull your tenant list and identify everyone who hasn't had a rate increase in the last 12 months. That's your starting point.

Sort them into three groups: first-time increase candidates (7-12 months tenure), high-variance tenants (20%+ below your current street rate), and your delinquent/late-pay group. Start with 10-15 tenants next month. Send the notices. Track what happens.

I'll bet you a month's rent you'll be shocked at how many just... stay.

Stop leaving money on the table.

If you've got war stories about rent increases (good or bad), hit reply. The data tells one story, but the trenches tell another.

&

Here's the part that should keep you up at night: every dollar of rent increase you don't capture isn't just lost monthly revenue—it's lost property value that compounds over time.

The math is stupidly simple, but most operators don't think this way.

Let's say you have 100 units averaging $100/month. That's $120,000 annual revenue. Self-storage typically operates at 36% profit margins, so you're generating roughly $43,200 in NOI.

Now implement a 10% rent increase with 80% retention. You lose 20 tenants temporarily but gain $12,000 in annual revenue from the 80 who stayed. After backfilling those 20 units at your new rate over 60 days, you're actually up about $10,800 in annual NOI.

Here's where it gets interesting: every $1 in additional NOI adds $14.30 to your property value at a 7% cap rate.

That $10,800 NOI improvement? That's $154,286 in property value. From one systematic increase across 100 units.

Scale that to 600 units, and you're looking at $900,000+ in added value over 2-3 years of disciplined increases.

The REITs figured this out a decade ago. That's why they're so aggressive with rent increases—they're not optimizing for tenant happiness, they're optimizing for exit multiples.

You should be too.

&

&