Occupancy

In what may be our most controversial survey result to date, we analyzed the role of model apartments and whether they were actually effective in the leasing process.  Several interesting results came out of the survey, such as how much apartment communities spend on decorating their model apartments, and how often they change that style.  However, the most interesting results revolved around their effectiveness as leasing tools.

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In the early days of my leasing career, I was fortunate enough to work for a company that realized the benefits of offering a ‘hefty’ reward for perfect leasing of the property. The goal – 100% leased.  The reward – dinner.  Not just any dinner, but dinner for the entire leasing team, anywhere in St. Louis we selected and we could order anything we wanted.  Shazaam!!  This was a big deal.  Such a big deal that we pushed daily to achieve this goal.  Often the 100% leased status only last a day or two, due to applicants being denied or the inevitable cancellation, but we were still maintaining incredible leasing percentages and occupancy; all on a property with harvest gold appliances and chocolate brown carpet!  The entire team would be talking about where we would go, what we would wear and what we would order and cheering each other on to reach that goal on a daily basis. 

The cost to the owners of this extravaganza?  For a staff of 5-6 team members, at most $1,000.00 and that’s probably on the high end.  Heck, we were dining at places without prices on the menus!

The payoff for owners?  Thousands and thousands of dollars, for years to come.  At an average rent of $500.00 per month on a 400 unit property maintaining an average of 97% occupancy, tip to 100% leased, that’s a lot of revenue. But just for old times’ sake, let’s do the math.  400 units leased/390 units occupied x $500 rent per month x 12 months lease term = $2,340,000.00 annually.  More when they renewed.

"Ohhhh…what’s love got to do, got to do with it?"

You’re probably singing that iconic Tina Turner song in your head right now, aren’t you?  I am!  I just love that song!  And what exactly does love “got to do, got to do, with it”?  If you’re talking about great apartment leasing…just about everything, ’bout everything, to do with it!

As a professional leasing agent, we do so much more than ‘just’ leasing.  Resident services, market surveys, marketing, walking apartments, traffic reports, and so much more.  But it’s all related to leasing – and you either love it or leave it. 

By Linda Day Harrison, theBrokerList, Chicago, IL

In the history of property ownership and property management, as far back as the Stone Age (maybe not that far back), we have always called our customers “tenants” and for some reason it just stuck like glue. We can try to shake the term, but no matter how we spin it, turn it, or twist it the relationship comes back full circle to calling them “tenants” and not customers. It is rather maddening to say the least. Even though I preach this and believe it, I catch myself using the term because nobody understands who I am speaking about when I say “customer!”

What drives me batty is that when you consider all of the blood, sweat, and tears we put into marketing, promotions, “tenant” retention, newsletters, “tenant” parties, and “tenant” appreciation, why do we not refer to our “tenants” as customers? It just does not make logical sense.

Small shifts in data tend to quickly make headlines and dominate conversations. Most recently, it’s the uptick in single-family home sales creating some news about apartment renters leaving to buy homes. But it’s not a big spike – and even if it was, that wouldn’t necessarily be a bad thing for the U.S. apartment industry. Greg Willett and Jay Parsons from MPF Research explain why in this video edition of Apartment Market Dynamics.

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA

It was just a few months ago when the tenants were in the office signing the one year lease agreement. The leasing agent followed the office procedures and made sure to review the lease terms and obligations prior to asking for binding signatures. Then with the swipe of a pen the property was considered off the market and occupied for the year.

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA

In a recent notice received by our legal counsel addressing this very issue, apparently if you own rental property in California the scary answer is yes! The great state of California is widely known as a pro-tenant state when it comes to tenant-landlord related issues. Many cities such as San Francisco and Los Angeles are saddled with pockets of rent controlled areas making investment opportunities less attractive. They also have unfavorable statewide eviction laws that allow deadbeat tenants to continue residing in properties months after defaulting on rental payments.

By Carla Toebe, New Century Realty, Kennewick, WA

They say that abandonment is a landlord’s or property manager's worst nightmare when dealing with a tenant. How do you know it is really abandonment? Sometimes it’s obvious when everything is gone, the place seems perfectly empty, and the tenant's keys are lying on the counter. But what if the place is full of furniture, the food is still in the cupboard, and you can't get a hold of them? They haven't paid their rent, they haven't returned your phone calls, no one has seen them, and you can't get a hold of anyone on the emergency contact form you had them complete when they moved in. Surely this means they must have abandoned the place. So you change the locks, and uh-oh! There they are coming back claiming you have now burglarized their place. Oh no! This can't be, they clearly abandoned the place and you took all the steps you had to take that were required by law.

By Linda Day Harrison, Manager Labs, Chicago, IL

There are business models in all shapes and sizes. There are retail stores, medical and legal practices, cleaning companies, general contractors, grocery stores, etc. So when you think about a business, how many business models do you know of where the business owner outsources the entire business to another party? For instance, if you visit your local grocery store, is it managed by a grocery management company? How about a retail store management company? So what makes the residential real estate investment business any different? Why are there so many property management companies and outsourced service providers to the property industry?

According to a colleague of mine, the answer is quite simple, “It is not easy, there is so much at stake, and there are many moving parts.” Also, when you think about properties as investments, there are often multiple partners and joint venture groups who own the assets. In those cases, the managing partner realizes they do not have enough time or expertise to do all of the functions required of them to maximize the value of the asset. That is what outsourcing offers.

I've had clients asking me  this very question for years. Are shops really valuable to a company? Is there a better way? Let me give you some reasons why  mystery shops just might not be the answer you're looking for at your company. For the sake of this discussion, we're limiting this to phone and in-person shops.

1. Shoppers have bad days. Just like Leasing Professionals, shoppers have 'off' days, too. And this is reflected in the shopping report  that describes the Leasing Professionals' behavior. I once worked for a company who so strongly believed in this that they made sure their employees were shopped TWICE on the same day. That way, if one shop was horrible and one was good, they could throw the bad shop out (chalking it up to a bad day for the shopper). 

2. Shoppers have to remember how you behaved on the tour. Having been shopped numerous times in my career, I can tell you that sometimes shoppers get their facts confused. I have had shopping reports that accused me of failing to show all of the amenities on the property to the shopper - and they listed the ones I left out. The  problem? The property didn't HAVE the amenities I supposedly overlooked.