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Brent Williams' Apartment Blog

Thoughts, comments, and ideas about the overall multifamily industry, as well as a property-specific focus on resident retention and apartment marketing.

Do Model Apartments Actually Help You Lease?

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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Along with asking whether a community utilized a model apartment or a mini-model, we also asked about their current occupancy and their recent closing ratio.  The closing ratio provided results that were interesting, although possibly not as reliable as we had hoped.  The potential issue is that respondents reported a median closing ratio of 49%, which we felt was too high to be considered accurate in and of itself.  But even though the closing ratios appeared inflated, we found that inflation was consistent between those who had a model apartment and those who did not.  Therefore, although we felt the reported closing ratio itself was not useful, we found that the difference between the closing ratios was an interesting topic of conversation.  For respondents with a model apartment, they reported a closing ratio of 47%, while those that had no model apartment reported a closing ratio of 53%!  In other words, apartment professionals indicated that they were able to lease at a higher rate without a model apartment.

Questions about the closing ratio aside, we also asked about occupancy, which although possibly inflated, did appear to be somewhat more accurate.  Using occupancy as a guide, we found similar results, with median occupancy for communities with a model apartment at 95% and occupancy without a model apartment at 97%.  Again, apartment communities seemed to achieve better results, or at the very least, comparable results without a model apartment, rather than with one.

As this data is self reported and appears to include some inflationary factors, we can’t say definitively that model apartments hinder leasing, but it does open it up for discussion.  So why might apartment communities with a model apartment achieve lower occupancy and closing ratios relative to those without a model apartment?  Here are some possible explanations:

1)   Model apartments are not required or beneficial for high occupancy properties.  If an apartment community has already achieved high occupancy, keeping an apartment out of available inventory makes less sense.  Therefore, rather than saying that not having a model apartment resulted in higher occupancy, it is possible that having high occupancy leads communities to not have a model apartment.

2)   Model apartments serve as a crutch to leasing consultants.  It is safe to say that it is more difficult to paint a picture with words about how a vacant apartment might look fully decorated.  Therefore, a leasing consultant who has to master that ability might become more adept at the leasing process, rather than relying on the model apartment to do the selling for him/her.

3)   The model apartment is outdated or simply styled wrong, sending the wrong impression.  From our respondents, 63% indicated they had not redecorated their model in four or more years, which could mean that their model is simply outdated.  Or considering that 62% of communities decorated their model themselves rather than hiring an interior decorator, it is possible that the model apartment was not set up properly to begin with.

Overall, it appears that there are indicators that the model apartment may not be as effective as once thought, especially considering the relative cost.  The median rent lost by survey respondents was just under $12,000, indicating a pretty high price for a leasing tool that may not be effectively converting.

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This survey was sponsored by CORT and SatisFacts Research.  Please click on their logos to visit them.

StatisFacts CORT

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I only have one question..did anyone take a poll to determine whether the leasing agents and properties polled actually new how to effectively USE a model or mini-model. Did all the professionals polled have the same industry education and understood how to sell?

  Trudie Fry
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Thanks for the question, Trudie. By the nature of the poll, there will be a wide range of education/training levels on how to use the model apartment. So you are right, maybe that is also a function - that the training on specifically how to use the model apartment is not effective or being done.

  Brent Williams

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