Not all prospects are created equal. We often look at our prospect pool in a simple yes/no perspective - can they qualify or not? If they can, we tend to see them as one giant group, but in reality, some residents are just "better" than others! For example, will that resident stay only one year and leave, or will they stay 5 years? Will that resident refer friends to the community? Will that resident always pay on time? Will that resident be generally well-behaved with no noise complaints?
So if we accept the general idea that not all qualified residents are created equal, then we can create a plan to increase the chances that the best prospects turn into our residents! A lot of people are wary of doing this because of Fair Housing rules, and that is completely legitimate, but today, I am going to discuss the use of our screening process to help with this process. Considering that our screening should already be Fair Housing compliant, so there should be no concerns on that front*.
In the past I have suggested that we actively target prospects based on certain attributes. For example, if we found that teachers were more likely to stay two times as long as a normal resident, then we might think of ways to target teachers. Today, however, I am going to focus on the idea of incentivizing quality prospects who are already in communication with our property.
The idea of lease incentives may turn some people off, as the dreaded word "concession" doesn't sound like a very advanced leasing technique. But in this situation, we are using the incentive in a very targeted, precise way, and frankly, it doesn't necessarily mean a money handout. But first, we want to identify markers that help us identify better residents. Here are some information we already pull in our screening process that can help us potentially identify higher quality residents:
· Income Verification - We often already have minimum income requirements (national average: 2.8 times rent), but there could be benefits to finding someone who is even higher, as they can absorb rent increases better, and are more likely to have savings to reduce chance of skipping if there is a lost job.
· Rental History - Does the prospect hop around properties every year to find a new concession, or do they settle down for five years at a time?
· Employment History - Similar to rental history, does this person tend to switch jobs a lot, or are they more stable? Also, is their employer in an industry that might trend towards longer stays?
Again, what we are doing here is looking beyond the basic qualifiers, and now identifying markers that might indicate they are an all-star resident compared to a simple qualifying resident.
Once we understand what makes the ideal resident, we can start creating incentives specifically for them! For example, maybe we give them a move-in incentive of $50 for every year they had been at their prior residence. That means that the longer-term residents, as shown from their prior rental history, will get the largest incentive - the incentive is tied directly to a measurable marker that we have identified as being valuable.
Not only does this type of incentive only target your highest priority prospects, but it also creates exclusivity for those prospects. It gives them a sense that they have "earned" a bonus, and if they don't live at the community, they will have lost what is rightfully theirs. That creates a different sense of pull relative to a generic incentive that anyone qualifies for.
To be clear, this doesn't change the rule that if someone qualifies they are welcome to lease - we do not want to violate Fair Housing - but what it does is allow a community to identify and incentivize a prospect that is most likely to be your best resident.
As always, I would love to hear your feedback! Leave a comment below and share your thoughts on incentivizing certain types of prospects, or any other types of targeting you think is a good idea!
*I am not a lawyer, so always consult a lawyer before considering advanced targeting techniques such as those listed here.