Earlier today I took part in the monthly Grace Hill chat, this one focusing on student housing. Unfortunately, I was busy with other projects so I wasn't able to devote a lot of attention to it, but I did notice something odd about the chat. Normally, the Grace Hill chats, although very informative, usually end up focusing 90% on apartment marketing and only 10% on resident retention topics. I understand that the questions are user driven, but it always bugs me that we spend so much time on the less profitable of the two. But today, from what I saw, it was quite different. In fact, it seemed that it was highly focused on resident retention items such as parties, group games, such as the Wii or Guitar Hero, and surprisingly, service! Now I'm all for positive resident retention ideas, but it was just odd to see that much discussion on the topic when before it played such a second-place role.
 

Spending so much time on student housing retention is even more interesting considering the large obstacles it faces. The lifecycle of any student resident is almost required to be short as they will graduate (hopefully) or move home for the summer. Also, students often initially stay at the dorms, which means a lot of renters are already upper classman, meaning closer to graduation. In addition, college renters often have roommates - if that roommate happens to be a year ahead, then he/she will graduate before the younger resident, forcing that resident to either find another roommate or move out. In other words, the difficulties in retaining a resident are staggering!
 

So although I could see the argument that you have to invest more since they are harder to renew, it just seems like throwing more money at a resident who is destined to leave in the first place.
 

One other note about resident retention in student housing vs traditional housing: It seemed like the chat participants were just flinging out idea after idea regarding student housing events and programs, which vastly outpaces ideas for traditional housing. I wonder if onsite staffs are more likely to implement programs in student housing because their demographic is so homogenous, and therefore, easier to figure out? Do property management companies often ignore resident retention for traditional developments because it is just simply too hard to plan a program for such a diverse group of people? I would love to hear any thoughts on this!

A little while ago, I had one of the communities on my friends list put out a bulletin that I absolutely love. It reminds the residents what a great community they are at, it continues to perpetuate the relationship with specific staff members, it shows that the staff actually care about what the residents say, and it asks them to get "active" and post comments on their page. Even more, it is the first bulletin that I have seen that actually focuses on the residents rather than the prospects. Here it is:

Hi All!

We have wonderful news: in addition to the fact that Josh (Leasing) and Anna (Asst Manager) have both been nominated for awards by the Triad Apartment Association (Hooray!!), we've also been nominated for the Apartment Community of the YEAR!!!

Please post comments or send us emails (lincolngreen@sdbell.com) about why you agree that:
1. Lincoln Green is the best community EVER;
2. Josh is the BEST Leasing Associate EVER;
3. Anna is the BEST Assistant Manager EVER.
We'll forward your responses to the TAA!! Let everyone know how your apartment community is the best community around! We'll submit your answers Thursday morning, so post early and often!

I always remembered the "crime" question by prospects as being especially tricky to handle. Living in a big city like Houston, you can't just tell them that crime is a fact of life - they don't want to hear that. This new tool could be a way out. CrimeReports.com pulls in crime data from cities throughout the country, allowing you to see not only that a crime has been committed, but what type of crime specifically. The crimes are shown as icons on a map; however, if multiple crimes exist at one location, it still only shows ONE icon. This can be very important because visually speaking, it minimizes the impact of multiple crimes on a single location. This is especially important for multifamily housing since our housing is so dense, which usually means that on a map, multiple crimes do not show up on a map as spread out, but rather consolidated in a very tight area. The CrimeReports map, however, puts a much more positive light on a community if only seen with a quick glance. So when you get that crime question, it might be a good idea to bring up the map of your area and show it to your prospects directly!

(Quick aside) Historically, there has been a myth that apartment communities have more crime than single-family developments. Why is that? Well, officers responding to a call often just list the address and treat all the apartments in a community as a single unit. Therefore, instead of stating there were three crimes last year across 300 homes, it shows as three crimes for one property. You can see how the two different statements have much different connotations! Although many don't know this, NMHC did a study that showed that crime between apartment communities and single-family communities were actually quite comparable.

Is your company providing a retention plan that incorporates your residents' life transitions? It occurred to me tonight that we are trying to retain residents into apartments that don't "fit" them anymore. On a very basic level, consider that most people have incomes that trend up over their lifetime. If we try to retain them in the same apartment, their experience is not trending with them. Although their income goes up, the relative value of their apartment (older carpet, longer period since last painting, etc) goes down. Therefore, we are not providing solutions that evolve as their life does.

Let's flip through an "average" life cycle for a person:

- Leave the parent's house and either go to school or get job, likely with a roommate.
- Get first "real" job that allows them to live alone
- A few raises without dependants results in acquisition of new furniture, requiring bigger, and nicer, one-bedroom apartment
- Gets a significant other and they move in together. They get a two bedroom so they can spread out, although tight funds may require a lower class of property.
- Starts a family and needs a nursery, which sometimes requires a 3rd room
- 2nd child definitely requires another bedroom, and often a move into a house with a yard for the children.
- 50% get a divorce at some point, with one or both parties likely moving back into apartments.
- Retirement brings a desire for "simpler" living without home repairs, which brings an older generation back into the fold.

Have you ever witnessed a company that strategizes on how to grow with their residents and learn how to provide different solutions as they get older and their lives change? For example, what about a plan that provides a free move for an upgrade from a one-bedroom to two-bedroom apartment? Of course it would have to keep within the confines of Fair Housing laws, but imagine a property management company that strived to create a life plan with their residents to constantly provide an evolving service that matched the residents' evolving needs!

Well, I am in a great mood today because the fine folks at Grace Hill have asked to work on some polls for them! I am assuming most of you heard of this blog through Grace Hill, but if you are unfamiliar with them, definitely check out the website. It has great resources and a very active discussion board that I try to check out every single day.

[Note: You must be logged in to Grace Hill to follow the links in this blog post.]

I started brainstorming new polls to submit to Grace Hill and decided it would be a good idea to go over the previous polls to make sure I wasn't overlapping a prior poll. So as I sifted through the literally hundreds of past polls, I came upon two that both shocked and depressed me. I'm hoping I'm reading the results wrong!

The first poll I saw asked how much communities spent in resident retention per month. Almost 50 percent of responses selected only $50 per month!! I couldn't believe it - how is it possible that communities were only paying $50 per month on those that are vastly more profitable than obtaining new residents? (the overall average was $136/month - larger, but not that much better)

So as I stewed on that info for a while, I kept going down the polls and found one that discussed cost per resident acquisition. As you can see, the average cost of acquisition was between $100 and $250 per new resident. So how much does that really translate into? Well, it's a little hard to say, but let's take the industry average of roughly 60 percent yearly turnover, a 150 unit property, and an average cost of acquisition of $175. If you average that out over a 12 month period, it comes out to $1,300 per month for marketing to prospects!

I am now scared. Very scared. And no, I did not just watch the latest Saw movie or one of my all-time favorites, Event Horizon. No, this movie scared the crud out of me. I know it is a tad long at almost 13 minutes, but this clip will be invaluable to you in understanding your leasing consultants, some of whom may be straight out of high school or just a few years beyond.

http://www.cbsnews.com/sections/i_video/main500251.shtml?id=3486473n

So as many of you may know, I am not a developer, having a background in Finance instead. But even though I don't handle the coding for AptConnect, I hate being ignorant on the subject. So I have decided to take up coding in my spare time, if only to have a basic understanding.

So I started going through Amazon.com for the user reviews on certain books and had to share my favorite review so far. Hope you enjoy!

This is the worst book I have ever read. It' s like reading a book on how to use a light switch over and over again even though you've already done it 1000 times. Does that make sense? Either way, I'm drunk and this book sucked and I still can't program. What a waste. Good lord.

Sure swayed me!

I was looking around on Craigslist today and found this amusing post. It was a post by a property manager (the first part is the email from the scammer). I love how the property manager couldn't help with the apartment itself, but was happy to provide consulting on how to improve their scamming capabilities!

Gloria Rollins wrote:

Hello,
Thanks for your reply.I am a chemist by profession and i am currently working with St. Mark's Hospital,28 North wick Park,Wat ford Road, Harrow,Middlesex HA1 3UJ,United Kingdom.I will be in the states for at least 6 months and during this period,i will be working with the United States Environmental Protection Agency on a private research work.My financier in the States will be responsible for the rent deposit ,so I will instruct him to send you the payment as soon as you give me the go ahead to.Due to the limited time that I have before my arrival,have make some arrangements with a furniture company to supply the home with furniture,so I will need you to provide me with the measurements of the living room and bedroom so that the furniture company can supply the unit with furniture that will fit in well.As regards the lease agreement,i want you to send it to me for my review,i will eventually have it filled and signed on my arrival in your place as I am of the opinion that such documents are best filled and signed physically.Let me know how to move ahead as i intend to complete this deal before i move in some days time,I will let you know the exact date as soon as I get a booking on a flight to the states.So kindly provide the neccesary information for the payment to be sent to you asap(Name to be on the payment,Address to send it to and phone number).Thanks and sincere regards from me
Gloria
Tell...+447031862019

****MY RESPONSE****

If you consistently read Grace Hill, you may already be up to date on this particular discussion, but for a moment I would like to talk about the foreclosure problem in the U.S. and how it affects our industry, in particular. Now, I must note that I am not well versed in the specifics of foreclosure proceedings, so if you notice some problems with this logic, please let me know. There are two facets to this argument in relation to accepting these people back into our apartments. The first relates to the foreclosure itself - some see these borrowers as those that do not respect the obligations of the loan; therefore, we cannot trust them to respect the obligations of any lease, either. The other aspect is that even if we adjusted our screening process for the foreclosure itself, the borrowers may have already wrecked their credit beyond repair.

When dealing with the foreclosure itself, I think we should consider, as an industry, lessening the screening criteria to allow more of these displaced residents into our communities. This is a great way to take "market share" back from single family homes, by making our industry viewed as a compassionate alternative, which seamlessly fits into our other benefits of hassle free living. I don't buy the argument that these people are now destined to back out on every lease and loan they ever get. It just doesn't make any sense that there would suddenly be this many new people surface that don't respect the contracts they sign.

This does not mean, however, that we lessen other key screening factors, such as remaining credit issues. If a resident has unfortunately racked up thousands on credit cards trying to save their home, for example, we just can't help them without taking too much risk. So I am not suggesting we break down every wall and barrier and let a flood of residents come in to the fold, but there is a very strong argument for taking a risk-averse tactic on improving our own occupancy industry wide.