I’ve had a Kennards storage unit for the past 3 years.
When I initially spoke to them about the unit they offered me a discounted rate so I took the deal. There was no mention of it being an introductory rate or that it would increase.
I haven’t read all the fine print in the agreement but it will no doubt allow them to increase the rate as they please. I accept this.
Every year on the aniversary I receive an email stating that due to rising costs and demand they will be raising my rent. But it is always to the same amount and there are plenty of vacant units in the facility.
Year 1 - Requested 43% increase. I negotiated 7%
Year 2 - Requested 32% increase. I negotiated 9%
Year 3 - Requested 25% increase. I negotiated 6%
Year 4 - Requested 21% increase. Would not negotiate.
Also always been asking for the same amount every time. Clearly they have a target rate they want for my storage unit.
With those sort of proposed increases their operating costs really need to be looked at!!
Needless to say I’ll be moving out but I’d like to see them held accountable for this sort of behaviour.
What options do I have here?
I’ve had a Kennards storage unit for the past 3 years.
You could look for an alternative provider for your storage needs. Two reasons for this
- if you decide not to stay with Kennards you have an alternative &
- you could use the other provider’s quote as a negotiating point to have Kennards reduce their invoice/increase. If you find a few you may also be able to use all the quotes to see if a better deal exists for you.
If they believe they have a “captive” audience Kennards may just be relying on a lack of “inertia” on your part to move and so just charge you what they think you will pay or what they want.
If you have to move you should also consider how much that move may cost you and factor that into your calculations of savings. With a new provider of storage you may also be able to negotiate a longer period of fixed costs for your storage unit eg 2 or 3 year contract and that may weigh into your benefits as well.
I don’t know that there are legal avenues to contest the increases as it is probably not well legislated to protect against this as say Home Rental increases are.
It might assist you to look outside the big two or three, if there are other options?
Kennards and Storage King both claim no 1 status nationally in different ways, followed by National Storage.
There may be others in your area as @grahroll suggests who have a more amenable attitude.
Kennards branded are typically owned and operated by Kennards although they also offer management services to investors who choose to not do the up front part of the business.
Storage King promote themselves more to investors and franchisees.
Even with a number of smaller operators competing for the business it’s likely the big two or three might set the market rates if they hold the majority of the supply. Better to have a 10% margin per unit with 75% occupancy than 5% margin with 100% occupancy. Unless there is no competition, upon which you can set the local rate.
Note that the general commercial light industrial property market has been relatively flat for a long time and is expected to remain so for the next five years. Unless your storage is in a high density inner area rezoned for residential high rise it’s difficult to understand how the owners might reasonably be under financial and costs pressure. Even interest rates are soft.
It sounds like another case of a loyalty tax…which often occurs in many other sectors including insurance, banking, energy etc.
Many consumers don’t check renewals and just signoff what is offered rather than checking and seeing if what is offered is best for them and their wallets.
Unfortunately loyalty tax is easy profit for businesses as they know sometimes it is harder to change service providers than accept the premium increases. It would be better of businesses treated loyalty the same way consumers do with the same businesses.
Even if not a fixed price for 2 or 3 years, you could try for an agreed rate of increase e.g. CPI (best case for you probably) or CPI+a few%.
The true cost to the provider goes up as land values go up, even if their operating costs don’t increase.
As such, if you don’t access the contents very often, it may be worthwhile to choose a storage location that is further away in a less fashionable area.
A business has the right to price their products however they wish and ‘looking at their operating costs’ from the customer-side is not part of capitalism. Pricing to the customer (whether the customer be a business or a consumer) is supposed to be based on supply and demand, and competition. In our small market such a it is, many of us are skeptical it works as it does in the EU or US sized markets.
A customer’s leverage is walking to another supplier, and in the absence of that negotiating if it can be ascertained the supplier has excess inventory - in this case a large number of un-let storage units. Other than that, caveat emptor for product, quality, and pricing.
Your negotiated outcomes over years 1-3 show how the lazy tax improves profitability, but you might not be able to know all the reasons they reduced their asked increases. In year 4 perhaps their occupancy was up, or they decided they were going to recoup some of the aggregated ‘discounts’ they gave you over the previous 3 years, regardless of whether you categorise that they were discounts or just smaller rips.
Accountable for running a business as they see fit? Are you suggesting government should legislate price controls? If enough of their tenants walk that is how the message about their pricing is supposed to work.
Unless the business is a monopoly in that market.
Government itself can also be accountable if the government is creating barriers to entry that then reduce or eliminate competition. (I don’t think that applies in this specific case.)