The average storage costs in the UK are £26.23 per square foot, with price variations by unit size. In the U.S., the average storage unit cost typically ranges from $60 to $180 per month.
While these are the average prices and are a good guideline to stick to, rate increases are often necessary to keep up with market fluctuations, increased operational costs, and demand.
However, navigating a price increase can be tricky. You could frustrate your customers, see an increase in move-outs, and lose out on revenue.
In this article, we’ll share some best practices for effectively increasing your self storage unit rates without losing customers.
What Are the Two Types of Self Storage Rent Increases?
There are two types of tenant price increases that you can implement: new tenant increases (street rate) and existing customer increases (tenant rate). Let’s unpack each of these:
1. Street rate increases
These are adjustments to your rental rates for self storage units that apply only to new customers booking a unit. These increases don’t affect existing tenants who have already locked in their rental rates under previous pricing structures.
Several factors influence increases for new tenants, including market demand, seasonal demand, and competition.
2. Tenant rate increases
These price increases affect customers who are already renting your self storage units. They are typically implemented after a tenant has been in a unit for a certain period rather than at the time of rental.
Market adjustments, rising costs, occupancy rates, and lease terms may be reasons to increase existing tenant rates.
When Is It Time to Increase Your Self Storage Units Rates?
Source: Freepik
Raising the rates of your self storage units requires strategic planning. Here are the key factors to consider when determining whether it’s the right time to adjust your rates:
Key factors to consider for street rate increases
➡️ Conduct thorough market research
Before increasing your rates, research the local self storage market to understand where your pricing stands compared to your competitors. Key areas to research include:
👉 Competitor pricing: Analyze what similar self storage facilities in your area charge for units of comparable sizes and features. If your prices are significantly lower, there may be room for an increase for new tenants.
👉 Demand trends: Demand fluctuates throughout the year for most self storage facilities. During peak seasons, like summer, when people move frequently, you may have greater pricing flexibility for new customers.
👉 Customer preferences: Look at online reviews and customer feedback to understand whether tenants perceive your facility as offering good value. If you offer premium features such as climate-controlled units, security, or 24-hour access, you can justify a price increase for new tenants.
Key factors to consider for tenant rate increase
➡️ Assess your occupancy levels
Your occupancy rate is one of the most telling indicators of whether a pricing adjustment is necessary.
If you have high occupancy rates (90% or higher), demand is strong, and you can likely increase your rates for existing tenants without significantly affecting retention.
Raising your prices might not be the best move if you have low occupancy (below 70%) and many vacant units. Instead, consider offering limited-time promotions or adjusting your rates selectively for new or potential tenants.
➡️ Factor in rising operational costs
Your self storage company should be profitable, but rising operational expenses can quickly affect your margins. If your costs have increased significantly, you may need to raise your rates for new tenants to maintain profitability.
➡️ Avoid frequent and excessive increases
While raising rates is necessary for long-term sustainability, doing it too often can drive existing tenants away. Some best practices include:
👉 Limiting increases to once or twice a year: Frequent adjustments can frustrate existing customers and push them toward competitors.
👉 Giving advance notice: Clearly communicate price changes to existing tenants at least 30 to 60 days in advance. This transparency builds trust and reduces backlash.
👉 Incremental increases work best: Instead of large price jumps, consider small, incremental increases over time for your current tenants to make the change more acceptable to your customers.
➡️ Build increases into your rental agreement
Consider including the possibility of scheduled rent increases in your storage contract to avoid surprising tenants with unexpected price hikes. Doing so:
👉 Provides predictability: Tenants are less likely to object if increases are clearly outlined in their rental contract.
👉 Simplifies revenue forecasting: You can project future earnings and business growth more accurately.
👉 Encourages long-term tenants: Some customers may opt for longer leases to lock in current rates, reducing your turnover.
Optimizing Tenant Rate Increases: Which Units Should You Adjust?
Source: Freepik
When increasing self storage unit rates, it is vital to avoid applying a blanket approach as not all units are equal in terms of size, demand, and location, which means some can command higher rents while others should remain at their current rate.
Below are some steps to take to determine which units to adjust and why:
1. Choose selectively
As you know, self storage units vary in size, accessibility, and features, which means their demand also differs.
It’s essential to consider which units are most valuable to new tenants and adjust your pricing accordingly. Factors to assess include:
👉 Unit size: Larger units, such as 10x20 or 10x30 (200 or 300 square feet), are often in high demand for long-term renters, businesses, or those storing entire households. These may be prime opportunities for a price increase for new customers.
👉 Location within your facility: Ground-floor and drive-up access units typically rent out faster than upper-floor units. These units could likely handle a rate increase for new customers if demand is consistently high.
👉 Climate controlled vs. standard units: Climate-controlled units often attract tenants who store temperature-sensitive items like electronics, documents, or furniture. Their added value justifies adjustment more than non-climate-controlled units.
2. Focus on the most popular units first
As mentioned above, you should analyze your occupancy data to identify which unit types are consistently in demand for new tenants.
If certain units are frequently rented out with little downtime between tenants, they are good candidates for a price increase for new customers.
For example, if all your 10x10 (100 square feet) climate-controlled units are fully booked with a waiting list, increasing the price by 5% to 10% for new customers may be a low-risk strategy.
If your 5x5 standard units are slower to fill, keep their pricing stable to avoid discouraging potential renters.
3. Use the perceived discounts method
A smart pricing strategy involves selectively increasing rates on specific unit types while keeping others unchanged to create a sense of value for new clients, known as the perceived discounts method.
If you raise the price of 10x10 climate-controlled units but keep your 10x10 standard units the same, your current tenants may view the standard units as a better deal.
Similarly, if the cost of drive-up 10x20 units increases but indoor 10x20 units remain stable, some tenants will choose the indoor option while others will pay the premium for convenience.
This method makes both new and existing customers feel like they are getting a discount, even when some prices have increased, helping to maintain strong occupancy.
How Much Should Self Storage Rent Increases Be?
Source: Freepik
Determining the right amount to increase your self storage unit rental rates is a delicate balance.
Increase them too much, and you risk losing existing tenants to competitors; raise them too little, and you may fail to cover rising operational costs or maximize profitability.
You can implement a fair and effective rate adjustment strategy by conducting thorough research and considering factors such as economic occupancy and perceived value.
Here are some factors to consider when determining your self storage price increase:
➡️ Determine the added value of your facility
Before deciding how much to increase your rates for new customers, assess whether your facility offers more value than nearby competitors.
Key factors that justify a higher rent increase include:
👉 Cleaner, well-maintained units: If your facility is known for spotless, well-kept units compared to competitors, you can charge new customers a higher premium.
👉 Special features: Climate-controlled units, 24-hour security cameras, or drive-up access can justify higher prices.
👉 Extended access hours: If your competitors close early but you offer 24/7 access, new tenants may be willing to pay more.
👉 Prime location: A facility in a high-demand area, such as near a city center or major highway, can ask higher prices than ones in a less accessible location.
For example, if a competitor charges $150 per month for a 10x10 climate-controlled unit with limited access hours, but your facility offers 24/7 access, higher security, and an on-site manager, you could justify increasing your rates for new customers from $145 to $160 per month.
➡️ Consider economic occupancy
Economic occupancy is another crucial factor when deciding how much to increase your rent.
Unlike physical occupancy, which measures how many of your units are rented out, economic occupancy measures the percentage of actual revenue collected compared to potential revenue if all units were occupied at the full market rate for existing customers.
You can use this formula to determine your economic occupancy:
Let’s look at an example calculation: You have 100 units, each renting for an average of $200 per month. If fully occupied at market rates, your potential revenue would be $20,000 per month.
However, due to discounts, older tenants on lower rates, and vacant units, you’re actually collecting $17,000 per month.
Your economic occupancy is: (17,000 ÷ 20,000) ×100 = 85%.
If your economic occupancy is below 90%, a rent increase may be needed to bring existing tenants closer to market rates.
➡️ Use a tiered approach
As mentioned above, you should adjust your rates based on demand, unit type, and existing tenant agreements rather than applying the same percentage increase to all units.
For example, high-demand units with premium features could handle a 10% to 15% rent increase for new tenants. On the other hand, long-term tenants paying below market rate may need an 8% to 12% increase to align with market rates.
➡️ An example of a rent increase
Once you’ve assessed your facility’s value and economic occupancy, it’s time to determine a reasonable price increase based on market conditions. Let’s look at three of your options:
👉 Modest increase of 3% to 5%: Best for facilities that are already priced at market rates but need to adjust for fees for existing tenants for inflation or rising costs.
👉 Moderate increase of 6% to 10%: Justified for new customers if demand is high, occupancy is strong, or your facility offers premium features.
👉 Significant increase of 10%+: Suitable for existing tenants paying well below the market rate for premium units in high-demand locations.
Let’s unpack an example. A 10x20 drive-up unit is currently rented at $180 per month, but the market rate in your area is $200 per month.
Instead of immediately increasing to $200 for your existing customer, you raise the rent by 8%, bringing it to $195 per month to remain competitive while boosting revenue.
How to Communicate Rate Increases to Existing Tenants
Source: Freepik
Raising self storage unit rates is necessary for maintaining profitability, but it can be a sensitive topic for existing tenants.
Here’s how to effectively communicate rent increases while keeping tenant satisfaction in mind:
💡 Pro Tip: Use Stora’s Automated Pricing Increase Feature With a digital management platform like Stora, updating rental rates is simple and efficient. Once scheduled, price increases are fully automated. No more manual calculations, spreadsheet tracking, or individual notifications, just a seamless way to optimize pricing and maximize revenue with minimal effort. |
➡️ Give tenants ample notice
Providing sufficient advance notice gives existing tenants time to plan for the adjustment. Depending on the contract terms, most storage providers notify tenants 30 to 60 days in advance.
Sudden price increases can create frustration and lead to unnecessary move-outs if you don’t give advance notice.
Make it clear when the increase will take effect and explain any alternative options available for tenants.
➡️ Use multiple communication methods
Not every tenant checks their email regularly, and some might not open letters immediately.
To ensure existing tenants receive your notice, use at least two communication channels: text message, phone call, a physical letter, or email.
➡️ Clearly explain the reason for the increase
Transparency is crucial when informing current tenants about rent increases. Instead of just stating the new price, provide a brief but clear explanation for the adjustment. Reasons to highlight include:
👉 Rising operational costs surrounding maintenance, insurance, and utilities.
👉 Improvements to the facility, such as new security systems, better lighting, or climate control upgrades.
👉 Market demand.
➡️ Handle tenant objections professionally
Some of your existing tenants may push back against the increase, so handling their concerns professionally and with empathy is important. Here’s how you can do this:
👉 Start with an apology: A simple acknowledgment of their frustration can help diffuse the situation.
👉 Offer alternatives: If a tenant is struggling with the new rate, suggest a more affordable storage unit size.
👉 Highlight any current discounts: If the tenant is still paying below market rates even after the increase, remind them that they’re getting a good deal.
👉 Remind them of high occupancy rates: If your facility has a waiting list or high occupancy, emphasize that demand is strong and pricing adjustments reflect market conditions.
Laws and Regulations for Existing Tenant Rent Increases
Source: Freepik
Certain laws and regulations govern how storage providers must handle existing tenant rental increases. Let’s unpack these:
⚖️ UK laws and regulations
In the UK, self storage price increases are primarily governed by general consumer protection laws, as there are no specific regulations targeting rent adjustments in the self storage industry.
Key legislations influencing price increase practices include:
Consumer Rights Act 2015
This act mandates that all terms in consumer contracts, including those for self storage services, must be fair and transparent.
Any clause allowing for price increases should be clearly outlined in the rental agreement to ensure customers are adequately informed.
Consumer Protection from Unfair Trading Regulations 2008
These regulations prohibit businesses from engaging in unfair commercial practices, such as misleading actions or omissions.
In the context of self storage, operators must avoid deceptive pricing strategies and ensure that any potential for rent increases for current tenants is communicated transparently to customers.
⚖️ U.S. laws and regulations
In the U.S., self storage rent increases are governed by state laws and regulations, which can vary across different jurisdictions.
Each state has its own set of rules regarding how and when operators can implement rent increases.
For example, certain states require you to provide a minimum notice period before adjusting rates for existing tenants. In California, you’re required to give tenants at least 30 days’ notice before the increase.
Please refer to your local Self Storage Association for more information.
Implement a System to Help with Existing Tenant Price Increases
If you want to manage your price increases for existing tenants effectively, you need a system designed to help.
Stora has introduced Price Increases, a powerful new feature designed to help self storage operators boost revenue effortlessly.
This tool allows facility owners to automate their pricing strategy, maximizing profits while keeping up with inflation and market demand.
The feature eliminates the need for manual tracking or individual notifications—once scheduled, Stora automates the entire process, automatically applying increases and notifying tenants.
By default, the system suggests a 10% increase for tenants who have been with the facility for over six months, but users can fully customize these rules to fit their pricing strategy.
Once scheduled, Stora applies the increase, updates tenant billing, and sends automated email notifications to ensure transparency.
The Ultimate Tool to Manage Your Pricing
Raising self storage unit rates for both current and new tenants is crucial to maintaining a profitable business, keeping up with market trends, and covering operational costs.
By strategically deciding when and how much to increase rents—and clearly communicating changes to existing tenants—operators can maximize revenue without sacrificing occupancy or customer satisfaction.
However, manually tracking rent increases for existing tenants, notifying them, and adjusting billing can be time-consuming and complicated.
That’s where Stora’s new Price Increases feature comes in. We eliminate the hassle of managing rent increases for existing tenants with fully automated price adjustments, built-in revenue tracking, and seamless tenant notifications.
Book a Stora demo today to see how our software can make revenue growth effortless and hassle-free.
