Raising rates is one of the most stressful decisions an operator can make. Every time I've done it, there's a voice in the back of my head saying, "What if everyone leaves?" That fear keeps a lot of operators charging 2019 rates in 2026.
Last fall I pushed through a 12% increase across 340 units at one of our facilities. Here's exactly what happened, what I'd do differently, and the framework I use now.
The Setup
The facility was sitting at 93% occupancy. Street rates hadn't changed in 14 months. Meanwhile, insurance went up 18%, property taxes went up 9%, and we'd invested $35K in LED lighting and security upgrades. We were leaving money on the table.
The decision wasn't whether to raise rates — it was how to do it without triggering a wave of move-outs.
The Approach
I didn't raise everyone at once. Here's the phased approach we used:
Phase 1: New Tenants First (Week 1)
We bumped street rates by 15% across all unit types. New tenants don't know what you were charging before, so this is risk-free. This also set the new baseline — existing tenants who check your website see that they're already getting a deal.
Phase 2: Long-Term Tenants (Week 3)
Tenants who'd been with us 12+ months got rate increase notices with 30 days lead time. These tenants got an 8-10% increase. The logic: long-term tenants have the highest switching costs. They've settled in. The hassle of moving their stuff to save $15/month isn't worth it for most people.
Phase 3: Mid-Term Tenants (Week 5)
Tenants at 6-12 months got 12% increases. This is your riskiest cohort — they're past the initial inertia but haven't fully settled in.
Phase 4: Short-Term Tenants (Week 7)
Tenants under 6 months got the full 15% increase to match new street rates. Some of these tenants were still on move-in specials, so the actual dollar impact was larger.
Operator Note: I sent rate increase letters on a Tuesday. Not Monday (people are grumpy), not Friday (it sits all weekend and they stew on it). Tuesday gives them time to process during the work week when they're busy and less likely to react emotionally.
The Results
Over the 90 days following the full rollout:
- Move-outs directly citing rate increase: 11 out of 340 (3.2%)
- Occupancy dip: from 93% to 89% (lowest point, week 6)
- Occupancy recovery: back to 92% by month 3
- Revenue impact: +$4,100/month in net revenue even accounting for the vacancy
That's $49,200 in annualized revenue from a decision that took two days of planning and one awkward week of fielding complaint calls.
Key Takeaway: A 3.2% move-out rate on a 12% increase means 96.8% of tenants absorbed the increase. Most of the tenants who left were month-to-month short-termers who were likely leaving soon anyway. The revenue gain from the 96.8% who stayed far outweighed the temporary vacancy.
What I'd Do Differently
Better timing. I did this in October, which is fine, but April-May would have been better. Demand is picking up, and any vacancy from move-outs gets absorbed faster by seasonal demand.
More segmentation. I treated all unit types the same. In hindsight, I should have been more aggressive on climate-controlled (lower price sensitivity, fewer alternatives) and more conservative on drive-up 5x5s (highest turnover, most price-sensitive).
A phone call for top accounts. We had three tenants renting 4+ units each for their businesses. A personal call before the letter would have gone a long way. One of them called me upset, and a 5-minute conversation smoothed it over — but I should have been proactive.
The Framework I Use Now
Every six months I review rates using this checklist:
- What are the top 3 competitors charging for comparable units?
- What's my occupancy by unit type? (If any type is above 95%, rates are probably too low)
- What have my operating costs done in the last 6 months?
- What's my average tenant duration? (Longer tenure = more pricing power)
- When was the last increase?
Example: If you're at 96% occupancy on 10x10 climate units and the nearest competitor is charging $20/month more than you, you're not "full" — you're underpriced. Raise street rates immediately, and phase in increases for existing tenants over 60 days. You can absorb a few move-outs and still come out ahead.
The Hardest Part
The hardest part isn't the math. It's sending the letter. Every operator I talk to knows they should raise rates. Most don't because the fear of vacancy is louder than the reality of underpricing.
But here's the math that finally got me over it: keeping rates flat while costs go up 5-8% per year means your margins shrink every single year. A rate increase isn't aggressive — it's maintenance.