I’m in the multifamily industry in St. Louis, MO and have been for almost 30 years. It seems we have an ongoing, common issue with getting and keeping good maintenance techs. With so many property management companies losing & needing great maintenance techs, I posed the question on our facebook page as to why good techs are leaving and the common answer was wages. They can make more with their own business or in commercial construction jobs and also avoid the issues with being on call. So, I did some math. Again, I’m in the St. Louis market, so using some typical numbers we see here for this.
If the average rent is $900 per month and you lose just 6 residents a year due to poor maintenance, that’s a minimum of $5400.00 in vacancy loss if the apartment sits vacant for just 30 days. Now add in the wages paid to maintenance, contractors and leasing to turn and re-lease the units and the utility costs management will have to pay during this time, also any inspection fees. So, let’s add in another $500.00 per unit. Now we’re at $8400.00 for the 6 units we lost due to poor maintenance. And these number are conservative. In all likelihood it will be much more.
And can we put a dollar amount on the poor reviews we’ll get and the chatter they’ll be telling literally everyone they know about the reason why they’re moving due to poor maintenance?? All the while, we’re spending ……
We all know the drawbacks of security deposits.
Because they can be so large, prospects are struggling to pull together the necessary funds to secure a simple lease. In fact, Zillow’s 2019 Consumer Housing Trends Report found that 49% of adults say they would not be able to cover an unexpected $1,000 expense. Broken down into a demographic perspective, 46% of Millennials, 40% of Gen Z, 52% of Gen X, and 62% of Boomers and the Silent Generation are not able to cover that $1,000 expense.
Beyond the steep cost of a security deposit, residents are virtually guaranteed to be upset with the lesser-than-expected amount of their deposit refund. Their anger can lead to nasty online reviews, and require that associates devote a hefty amount of time managing departed unhappy residents.
As an alternative to security deposits, many apartment communities have turned to surety bonds – only to find that bond pools present their own brand of headaches.
Surety Bond Primer
Apartment operators have opted to offer optional surety bonds as a way to increase conversions and occupancy rates at their communities, however, these same operators have experienced low adoption rates of surety bond programs, negating their prospect as a wider solution.
Surety bonds are a three-party system that typically consist of the resident, the property, and the bond guarantor. The resident pays a portion – usually 17.5% – of the total deposit amount at move-in as a non-refundable fee. So, instead of paying a hypothetical $1,500 ……
The era of the smart apartment home is upon us.Like the owners of single-family homes, apartment residents have come to appreciate the convenience and lifestyle benefits of smart home devices. According to a recent report by the National Multifamily Housing Council and Kingsley Associates, more than 70 percent of apartment residents are interested in smart thermostats while 67 percent and 63 percent are interested in smart lighting and smart locks, respectively. Meanwhile, more than 56 percent are interested in smart/dynamic glass. The report also shows that residents are willing to pay for smart home technologies.But despite this general and growing enthusiasm for smart home solutions, apartment communities that implement them are bound to face a wide array of questions from residents. Below are some common questions and a framework for suggested responses.1) What are the benefits to me? Smart home devices can provide apartment residents with a level of convenience they haven’t experienced before. Emphasize to them how these technologies can allow them to control and monitor their homes remotely and can even help them save money. For example, smart thermostats can reduce energy bills by 10-23 percent.2) How much will it cost? This will vary, of course, depending on the solutions you’re implementing and the providers you’re using. But be direct and clear with your residents and explain to them that the cost is either incorporated into their monthly rent or that they will be charged a separate monthly fee.3) Do these technologies/devices come with security risks? Unfortunately, no technology is 10……
There is a lot of focus on technology in the apartment industry these days.
And rightly so. Today’s residents are seemingly glued to their smartphones, and we’ve all seen how software, mobile apps, smart-home technology and artificial intelligence can be used to significantly improve the resident and prospect experience.
But operators must not lose sight of the powerful impact that non-technological amenities and features can have on the lives of residents. Today’s renters have a real longing for connection and wellness, and forward-thinking owners and managers have realized that meeting these needs can also be achieved through innovations that don’t rely on Wi-Fi or a sophisticated software program.
Below are some non-technological innovations through which apartment operators can distinguish themselves from the competition and create a community full of satisfied and loyal residents (these amenities and others will be discussed in a session at the upcoming MICA 2020 conference):
Concierge and lifestyle services. Today’s residents are extremely busy. Between their demanding jobs and other responsibilities, they often have precious little energy or time to take care of everyday chores and tasks. When a community offers concierge and lifestyle services – dry cleaning, dog-walking, housecleaning, clothes folding and plant watering, to name just a few – it allows residents to easily handle their day-to-day responsibilities. These services enable renters to use their downtime to relax and unwind. In the process, these offerings can create real resident loyalty and satisfaction.
Exercise and wellness classes. Many apartment communities have a fitness center filled with cardio machin……
Like nearly everything in an increasingly digital world, rental pet policies are in need of a refresh.
Many pet policies in the apartment world are outdated and based on logic from a previous era, when residents viewed pet-friendliness as a luxury rather than a prerequisite, and before advanced tech tools were available to make life easier for onsite teams.
Some pet policies are worth keeping while others should be dumped and can go the way of the dial-up modem. Here is a look at some of the primary examples from each side:
Pet Policy Keepers
Pet Fees, Pet Deposits and Pet Rent: Residents understand that additional fees come with the pet-friendly territory for apartments. Most residents won’t balk at paying a premium to have their four-legged companion in their rental home, aware that the risk for damage is greater. For apartment communities, pet-friendliness equates to ancillary income opportunities, generally in the form of monthly pet rent, non-refundable pet fees and/or refundable pet deposits.
It’s noteworthy that some apartment operators are veering away from an initial refundable pet deposit and moving toward a non-refundable pet fee. They realize that most pets come with risk of damage and want to recoup some of the costs upfront. Some are even innovating their traditional pet rent (see ‘Flat Rate Pet Rent’ below).
Other operators are instituting something of a “resort fee” model, often utilized by hotels. This includes one all-encompassing recurring fee rather than separate bills for utilities, trash, pet fees and other community-related costs. This approa……
If you’re in the apartment industry, you’re undoubtedly well aware of the fact that, for the most part, owners and operators have been quite skittish about embracing short-term rentals.
The reasons are several. To start with, residents have long been leery of them. Also, short-term rentals can create numerous tax and logistical issues.
However, bold, forward-thinking operators have looked at the popularity of sites like Airbnb and VRBO and have seen a significant business opportunity. The revenue potential and operational challenges presented by short-term rentals will be examined in a session at the upcoming MICA 2020 conference in Atlanta.
If you’re contemplating incorporating short-term rentals into your multifamily portfolio, make sure you consider the following three potential challenges and plan ahead for them:
Taxes. There’s no way around it: taxes can get really complicated when it comes to short-term rentals. Depending on the jurisdiction in which your community is located, putting apartment homes up for short-term rentals could have some unexpected tax consequences. Some local jurisdictions even require you to get a lodging license and subject you to expensive hospitality taxes.Offering short-term rentals can be a great way to enhance a community’s revenue stream, but you have to make sure you understand the tax implications in the jurisdictions you’d like to operate and plan accordingly.
The organization and configuration of short-term rentals. Are you going to cordon off one floor of your community for short-term rental units and manage the units yourself? Are you going to dedicate a whole build……
Today, it’s hard to imagine the apartment industry without renters insurance.For a variety of reasons, many property management companies require their residents to purchase this kind of insurance. It covers properties for extreme property damage and liability caused by residents, and may also cover the cost of replacing a resident’s personal belongings in the event of a disaster. It is now simply industry standard. Given how widespread it is now, it can be hard to remember that renters insurance was initially met with a great deal of hesitancy and skepticism. But that reaction is worth remembering as new technologies and solutions continue to emerge for the industry’s consideration.A Reluctant EmbraceSometime around the mid-2000s, we began to see the major operators insert provisions in their leases mandating that residents purchase renters insurance. The benefits of doing so just became too obvious – for the property and residents alike. Before that, though, most communities were downright scared of doing so. The thinking went like this: if the property across the street doesn’t require renters insurance and mine does, I’m going to lose the prospect to the property across the street. You could almost hear property managers say, “I have to do it the same way we’ve always been doing it because if I do something different, it’s going to cost me residents.”Slowly, over time, enough properties had to deal with residents wanting owners to replace their stuff in the aftermath of a fire or other disaster. They saw the tremendous tension and bad……
Part 4 in the BINGO Series
It’s possible to achieve occupancy gains from giving indirectly through the generous nature of your residents. The donation of goods, services and sometimes financial support to local agencies and charities can actually factor in to a property’s marketing plan. Senior citizens are often active volunteers. There are a couple of ways volunteering can bring benefits to our community.
First, offer opportunities to encourage resident involvement in neighborhood activities and programs. Schools, churches and municipal programs can also benefit from volunteers
Volunteer at local animal shelter After school programs with listening to children read. Meal delivery for individuals that lack transportation Volunteer at a soup kitchen or local pantry supply. Local landscape projects Assisting with community gardens both on and off site.
Part 4 in the series about leasing to Today’ Seniors focus’ on the opportunities to incorporate Generosity and Gratitude into our lifestyles by volunteering. This series following the outline established by the word Bingo, has taken a quick view at the Better Than Lifestyle, the Independence of this Age Group, and the value of a sense of Neighborhood as a Network.
Seniors can volunteer to participate in after school programs with listening to children read. Local schools can use volunteers in the classrooms or with ancillary activities at the school. Making the space in your heart to give, adds another connection to the community.
One year a group of seniors from a local apartment community with partnered with the local police precinct. The police who attended the Senior morning coffee ……
In a perfect world, all residents at an apartment community would pay their rent on time, be quiet and thoughtful neighbors, write positive reviews of the building without prompting, attend events, bring you homemade cookies daily, volunteer to babysit your kids, offer to chauffeur you in their Maserati, set you up on a date with their cousin Chris Hemsworth…
But, it’s not a perfect world.
And, sometimes, despite screening them, some residents are, well, less than the ideal. Here’s how property managers should deal with difficult residents.
As an apartment operator, you need to be thinking every day about how to help your leasing associates drive lease conversions.
You can outfit your community with all of the modern, in-demand amenities and create dazzling marketing campaigns, but if your leasing teams aren’t converting leads into new residents at an acceptable rate, your portfolio is running against the wind.
And when it comes to boosting those conversion rates, operators will find the one-two punch of a customer relationship management system (CRM) and leasing call analysis very hard to beat.
Putting the Solutions in Action
In January 2019, one of our customers that manages about 30,000 units implemented a CRM and a leasing call analysis program to maximize its lead-to-lease conversion rate. The two solutions made an immediate impact. The company’s overall lease conversion rate rose from 4 percent in January to 8 percent in February and jumped to 11 percent two months later.
In addition, two key metrics also changed:
Managed Leads: This measures how well leasing associates are following the CRM playbook with each prospect. The score rose from 54 percent in February to 81 percent in April.
Shop Score: This measures the call quality on inbound leasing calls. The score rose from 58 percent in February to 66 percent in April.
The gains are the result of several improvements to the company’s leasing efforts derived from the implementation of the new technologies. First, the CRM provides associates with a “playbook” for each and every lead that comes into the syste……