Topic: Strategies for leasing an apartment in a Class C “Ugly Duckling” community

We can’t all work for Class A+ properties. Sometimes our properties simply need maintenance that is not in the budget, has issues with crime, or other problems that we struggle dealing with. But we still have to lease these “ugly ducklings”, so what strategies do you have leasing an apartment in this type of community?

Ahhhh, yes, the Vintage property! First things first - have a good attitude about it. Second, everyone on the team should Huddle Up (can you tell I am in March Madness mode - GO UK WILDCATS!) and start brainstorming, including maintenance, housekeepers, leasing, Managers, Reginals and even consult with your vendors since they see all kinds of properties and might be able to provide a unique insight.

Third, know the neighborhood and your competition. Make a list of comparisons and contrasts. You have to believe in your product and not lose heart and become discouraged. It's tempting to tell yourself and your team that no one wants to live here because we don't have .... blah, blah, blah. If you find yourself and your team doing this, try to pep up your game and change that attitude.

Then, come up with some GREAT things about your community:
Close to bus stops, active Neighborhood Watch Association, great Walk Score, pet-friendly, if you are a Section 8 voucher community, let people know you have great REAC scores and always pass unit inspections. Buy T-Shirts for all your team members and Residents and wear them! Having a little pride will attract people to your community, too. Showcase your property's natural assets, too: plant some perenniels and annuals; paint the exterior shutters and entry doors and keep up with your light fixtures (clean, fully bulbed). I believe you can position your community in a positive way with the right team and outlook.

My last property was more troubled than this.... Here are the problems I inherited:

Within the property:

1) Vacancy; of 66 units, 17 were vacant.
2) Delinquency: more than $13000.
3) BEDBUGS: property was completing a 100% treatment for bedbugs that affected the entire property due to a problem that went unreported for too long.
4) Cashflow: property was not cashflowing due to all of the above issues.
5) Unpaid vendors: I had over $100k in unpaid invoices that needed to be resolved before I could get anything done on the other issues.

Here is what I did to resolve what I could:

1) Aggressive marketing plan, including reducing rents for new move ins for the short term. We increased the move in deposit from $99 to $250, lowered the rent from $575 to $495 for first 6 months, then went to $525. Offered referral rewards of $300 to residents who brought in new people. The same bonus was offered if a local church or social service agency referred someone.
2) Evicted residents for cause including non payment, noise complaints, housekeeping issues that affected the success of the bedbug treatment. As a result, vacancy spiked to as many as 25.
3) The above changes put property on path to cashflow within 18 months.
4) Negotiated new agreements with existing and new vendors to cut costs and settle past due payables. I even FIRED AT&T for the office phone service/internet and had COMCAST take over all phone lines for roughly 1/3 the monthly cost. Worked with the owner to get payables down to the point where we could complete critical work. Due to the plethora of problems that were created by my predecessors; the owner was putting $30-$40k per month into my monthly budget for additional expenses.

As a result, I ended with less than $1000 in delinquencies and was able to get vacancies down to 3, with a 95% average occupancy for the last several weeks.

As someone who managed class c-f properties most of my career (until my current community) I can relate. A "C" property can be a real gold mine. Do your best with what you have, you may not have the best community but that doesn't mean you can't make it a success.

Keep your rents reasonable, many times there are excellent residents out there who just don't have the money for a more expensive community. That doesn't mean they don't want the best for what they can afford. Or even better they may have been living in a D or F community and are now able to make a move up. These are the people you want, those who want to do better. They will be more appreciative of their new home as it's a step up in their lives.

Get rid of anyone who's bring your community down, loud neighbors, troubled teens, criminal activity, etc. If you let them stay you WILL lose your best residents.

Reward loyalty- I know often times money is tight, but do a little extra for those who've been with you the longest. On one of my more troubled properties I would give poinsettia each Christmas for those who had been there over 5 year. I made a deal with my landscaper and got them at cost. Every year after those first plants were delivered I would have my residents who were about to reach their 5th year remind me starting in Sept. that they would get a plant this year too.

Get the kids involved- most times the parents are working and the kids are left with little to do. We had a large curb area in one of my communities that just never looked great. I purchased some inexpensive flowers and let them plant'em. That whole season they took care of watering and weeding, and kept the trash out. Their parents were proud and it gave both of them a sense of investment in their home.

Be tough but lead with integrity- I liked to imagine myself as the captain of a ship, it was my job to keep my ship (community) in top shape, and my crew (residents) safe and content. Sometimes the 'Captain" is not the most popular person because he/she's in charge, but if you find the right balance, they will understand you are doing what is best for the community. And if they don't like it they can walk the plank (leave)!

"Vintage," I like that. :)

Great advice so far!

I manage a B- or so property, but our location is A+ so I focus on that. I believe there is always something desirable about a community. Our job as leasing agents is to find out what that is and find the residents who will appreciate it.

Last year I covered a D property and it was tricky to market. What worked for me was enthusiasm. I posted inviting ads that gave just a small enough amount of information that prospects had to call me with questions. Once I had them on the phone, I could win them over with my sparkling personality and get them to come for a tour! :laugh:

During the tour, I couldn't rave about the phenomenal property or amenities since there wasn't anything phenomenal about them. Instead, I raved about anything else the prospect could relate to. Proximity to their favorite restaurant, a nearby recently renovated park, their very own free assigned parking space.

Ironically, my rents are as high as the A communities nearby. Reasonable rents will always draw people in, but it might not keep them. For my property, I don't want to attract residents who can't afford market rates. That may sound harsh but my financial obligation is to the owner. I provide excellent customer service so my higher rates are a good value.

Be careful with loyalty programs. Some states prohibit it. In my state, it is unlawful to treat long-term residents differently than new ones, so five year gifts would be out of the question. Give to one, must give to all. We have one resident who has been here 30 years. I sure wish we could discount his rent, but his rent increase brings him to market rate every year, the same rate the new move ins pay.

I used to try to get the kids involved...I was a joke among them, telling them every time I saw them "don't do drugs!" and giving out treats when I saw them after school. One was recently arrested for doing drugs. Another recently died of cancer. I still think treating next generations customers well is a good idea, but my heart is not up for it right now. :(

Residents with integrity will appreciate a manager with integrity even if circumstances are unpleasant. We are evicting a young lady, she has every reason to be mad at and hate me, but I'm honest with her and keep her in the loop about what our procedures are. She has surprised us by maintaining positive communication with our office above our expectations.

If I have a resident that has been there 5 years; I do reward that by having the carpet or paint replaced at renewal (the choice is the resident's and they get to choose the colors; but must follow the maintenance manager's directions to prepare unit). This does require careful scheduling with the resident if it is to be accomplished. I do carpet clean at other renewal times, but carpet or paint every 5 years. If the resident has been there 20; I will offer to transfer the resident to a new unit instead as the current unit is likely to have a number of maintenance issues that need to be taken care of and it would be easier to do while vacant.

I also create an open ended work order for maintenance to enter and repair as much as possible in order to catch things that went unreported. I have maintenance write down what was done and replaced so I have a record.

I, too, manage a "C" property with no amenities.

I did a little research and know exactly how long it takes to get to local amenities. For instance:

We are only 11 minutes from Riverwalk Park.
We are only 4 minutes from the Aquatics Center.
School is only 3 minutes from us.
Etc.

Make it sound like all of these local amenities are part of your community. I have brochures on local, close attractions. We have city parks everywhere.

I also mention that, if they decide to take some classes, the university campus is only 4 minutes away.

Use what you have and make it glorious!!!!