Yes, thank your lucky stars.

Good for the seller; they recognized the value of being in a rising rent environment & keeping such a high percentage of the units available for rental increases. Assuming there was a buyer, good for them for identifying an asset with the potential for greater than normal near-term revenue increases.

How to make the most of it? Good question:

a) If your local market looks to flatten, you might consider planning for increases across the board, but in return to renewing residents, offering rental-rate stability by locking rents. Spreading lease expirations equally over each month is risk averse.

b) Seems it's almost always good practice to reduce future lease expirations in months that the property has historically experienced higher turnover.

c) Nothing earth-shattering here, just a return to a more stable income preservation & rent growth plan.

d) Regardless, you can quantify the benefit of a programmatic increase in rents and extol the virtue(s) of increasing renewals, reducing prospective turnover and thereby decreasing risk.

e) The objective is to present well considered options that maximize value to the property/investment.

f) It's the owner's/investors call as to whether they perceive greater risk in keeping an atypical % of units in a MTM status or in mitigating that risk by spreading lease expirations evenly.

g) There's opportunity cost in every decision. In this case, any election to shift the asset from MTM leases to fixed-term leases means no longing having access to as many leases for rent increases. If market conditions continue to support substantial rent increases, adopting a lower-risk approach (like evenly spread lease expirations) may means less NOI.

For what it's worth (and assuming market conditions allow) I personally like allowing MTM rentals even during weaker market conditions. Just add/increase MTM fees to reduce demand for MTM lease terms. Residents who really need MTM's (e.g. those awaiting delivery of a newly built single family home or those awaiting news on a job transfer etc.) will accept MTM fees. It's good business practice to provide products our residents need, but also to place reasonable limits on their number.

Good luck.

Jeff

Transfer options if the property has recently had any changes weather it be as little as different paint in a transfer unit or fixture upgrades. I recently had the same problem with rents rising up to $195 however I offered transfers so that they can see why their paying a little more. Newer, fresher and a change sometimes can help!

I have this kinda to a science and black magic.

Find the 10% of the people who are the lowest payers.

in your case it's 12-ish

which one is the worst payer, that's the first on your list, Kick or Stick is what you are doing.
when that unknown becomes a known outcome, then off to the next...

1st person that moves out, do the following, full clean-out, wash, repair, fix and make it new.
take the new place, find the best payer with the smallest spread to the market, and offer that person
the unit first and price it near or at market... they bit and sometimes you need to offer staff that will help or 2 men and a truck. well worth it because a brand new place ( in my historically data studies of places I rent out ) keeps a tenant in for about 2.2 years on the low end and 7 years on the high end with a median of about 3.9

keep the rotation going, getting rid on the bad payers and moving the good payers, before you know it, your entire building is re-leased, your maintenance issues are low to none due to complete turnover of just about every unit.

but here is the key, no more late payers and wasting time with follow up

Now you can change this all around to the tenant's whom are the biggest complainers, cheapest, messiness ... whatever floats your boat. the goal is to get everyone signed up for a long time and reduce your level of stress.

Last time I did this, we did 90 units in less than 1 year and bumped the buildings cash flow by 19%. given that new cashflow went to the repairs for the first year, but we are now in the 17 month and we have only 1 person that has left. so we got about 6 months of real nice butter on the bread and no real maintenance issue ( just about all 90 units were fixed up and updated ).

and listen to the rest of the people. lots of good advice given.

Yes, phasing your renewal plan throughout 2019 is exactly what I'd do; but you'll also need to expect there to be a lot of move outs and you'll need to also be prepared for this: vendors, turn techs, materials, pre-leasing, etc. And I would also create a lease expiration matrix to make sure you are balancing your expirations for 2020. Good luck!

We acquired a property last year where 60% of the units were on a MTM lease. We took them in chunks, offered some great rates to sign a lease. Those that didn't we increased their rent by $200 for a MTM fee. It was easy and successful. Most residents were happy to sign a lease. We found that most residents were MTM not because they chose to be but because of mismanagement by the prior company.

Oh I know. People are going to be so angry.