MASTERING THE ART OF SELF-STORAGE CONTRACT RENEGOTIATION By Frank Rolfe

MASTERING THE ART OF SELF-STORAGE CONTRACT RENEGOTIATION

Entering into a self-storage contract typically relies on information provided by the seller. However, discovering undisclosed problems during due diligence can necessitate contract renegotiation. This article outlines a strategic approach to successfully renegotiate a self-storage facility contract, ensuring a mutually beneficial outcome.

Addressing Significant Issues Promptly

Upon identifying a major issue in the deal, immediately present it to the seller and propose a solution, such as a price reduction. Swift action is essential to either secure the concession or terminate the deal, preventing wasted time and resources on an unsalvageable agreement.

Handling Minor Issues Strategically

For smaller issues that may impact your interest in the deal, it's advisable to address them collectively near the end of the examination period. This approach prevents the seller from becoming irritated by constant, minor requests and helps maintain a more amicable negotiation environment.

Supporting Claims with Multiple Bids

To substantiate your claims and maximize the likelihood of a favorable concession, provide the seller with an itemized list of issues and three written bids for each repair. This demonstrates your due diligence and reinforces the necessity of the proposed repairs.

Focusing on Individual Items, Not the Total

When presenting your list of issues and bids, avoid mentioning the total sum of the proposed concessions. Instead, negotiate each line item individually. This tactic leverages human nature's tendency to underestimate overall costs, making it more likely the seller will agree to each item without becoming overwhelmed by the total figure.

Establishing a Walk-Away Price

Before renegotiating, determine the maximum price you're willing to pay for the property, known as your walk-away price. Commit to not exceeding this limit, as it will naturally influence your negotiation tactics and signal to the seller that you have a firm boundary.

Demonstrating Willingness to Walk Away

If the seller refuses to negotiate within your walk-away price, express gratitude for their time and effort, but convey that the deal is unworkable at the proposed price. Leave the door open for future discussions, as sellers may reconsider your terms and reach out later. By demonstrating your willingness to walk away, you can ultimately achieve your desired outcome.

Conclusion: Successfully Renegotiating Self-Storage Contracts

Renegotiating self-storage facility contracts is a common occurrence, but success requires adherence to a strategic approach. By promptly addressing significant issues, handling minor problems tactfully, providing well-supported claims, focusing on individual items, and establishing a walk-away price, you can effectively renegotiate self-storage contracts to achieve favorable results. This methodology has proven successful for industry professionals and can serve as a valuable guide for your own contract renegotiations.

By Frank Rolfe

Frank has been an active self-storage investor for around two decades, with self-storage units in many states throughout the U.S. His nuts and bolts knowledge of what makes for a successful self-storage facility has led to a three-decade career without a single failed property.