You cannot buy a self-storage facility without engaging in the old-fashioned art of negotiation. Nobody knows when the first negotiation in the world transpired, but it probably dates back to cavemen trying to get that extra piece of firewood. You simply cannot be an effective buyer without understanding its principals and engaging in the gamesmanship that has become negotiation today. So what are the basics you need to know?
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- Start low. When negotiating with a self-storage owner, the only way the price can go is up. So you have to start low. But not too low. You see, if you don’t get a counter-offer – or the property locked up under contract – you’ve accomplished nothing. The goal is to get the property under contract at as low a price as possible. So you need to start even lower than you intend to end up, as the seller will certainly throw out a price higher than you offer.
- Cash or terms price. In certain instances, you may want to promote the concept of the seller carrying the financing on the deal. To accomplish that you often want to offer two prices: 1) a cash price and 2) a terms price. Obviously, the terms price is higher. But never offer a cash price you can’t stand behind.
- Enthusiasm. Virtually all sellers respond well to enthusiasm on the part of the buyer. And why wouldn’t they? Enthusiasm is contagious and it comes across to the seller as a compliment on the quality of his property. Remember that most sellers have lost enthusiasm and they like buyers you remind them of themselves back when they were younger.
- Bonding. And speaking of reminding the seller of themselves at a younger age, there’s no more powerful formula for buying a storage facility than bonding with the seller. This makes them want to make the deal happen because they like you, and will bend over backwards to help the deal to occur. We have seen sellers lower prices, carry paper, pay for repairs out of their own pocket – and 101 other beneficial items – simply because they thought there was more to the sale of their property than just money. You create bonding when you spend time with the seller by phone or in-person.
- What would I have to do to get this deal under contract? That’s one of the most powerful forces in negotiating. The answer to that question creates the roadmap to getting the property bought. If you don’t take this enthusiastic and forceful stance, somebody else will and steal the deal out from under you.
- Know your “walk away” price. At some price the deal makes no sense. Figure that out before you talk to the seller. Make sure that you don’t waste your time negotiating a price that simply does not work. If the price does not end up in the range that you can accept, you need to know that in advance so you can push back.
- Win/Win deal making. The most successful technique for negotiating a storage deal is to simply adopt a “win/win” attitude, which simply means that a good deal works for both the buyer and seller. Every deal you do should allow you to get a reference from that seller about how happy they are with you.
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Understanding how to properly negotiate a self-storage deal is one thing, but putting it into practice is another. You should start the process by negotiating smaller items. These might include buying produce at a farmer’s market, or antiques at an antique store or mall. And you can also see this process in action on such History Channel shows as American Pickers and Pawn Stars.
With a little effort, you can be a much more effective negotiator and that skill will pay big dividends when it comes to saving money on your storage property. This article will get you started on your journey, and you will be able to gain the skill quickly if you simply practice it on a regular basis.