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What to Cut and What to Keep? A Property Manager's Dilemma

The headlines are bleak. And it appears that they are going to get 'bleaker' (is that even a word?). And everyone, it seems, is cutting back. According to Chicago based outplacement firm Challenger, Gray and Christmas, 20% of companies are actively cutting perks and another 10% are considering doing so. You're probably getting pressured to make cuts at your property or company. So just where DO you cut? Well, I can tell you a couple of places that you shouldn't.As companies trim expenses, they're 'de-perking' perks. And one of the first perks to go seems to be the fitness center. Whether it's an in-house center, or a subsidized membership, those are going by the wayside. So now is the time to emphasize your fitness centers more than ever. And if possible, upgrade a  machine or two (if it's in the budget). I predict fitness centers will be busier than ever over the next 18-24 months. Keep the equipment in great working order and keep the fitness center immaculately clean. This could be the breaking point for a renter's decision if they've lost their work-perk fitness center.Another area you shouldn't cut: the free coffee. Customers are leaving Starbuck's in droves as this survey, commissioned by Advertising Age magazine found:60% of Americans have scaled back on fancy or expensive coffee in the past six months; 56% report cutting back just since the beginning of the year. The culprit was overwhelmingly the economy, with 90% of survey respondents saying they are doing so to......
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Spending On New Residents VS Existing Residents

[Note: You must be logged in to Grace Hill to follow the links in this blog post.]I started brainstorming new polls to submit to Grace Hill and decided it would be a good idea to go over the previous polls to make sure I wasn't overlapping a prior poll. So as I sifted through the literally hundreds of past polls, I came upon two that both shocked and depressed me. I'm hoping I'm reading the results wrong!The first poll I saw asked how much communities spent in resident retention per month. Almost 50 percent of responses selected only $50 per month!! I couldn't believe it - how is it possible that communities were only paying $50 per month on those that are vastly more profitable than obtaining new residents? (the overall average was $136/month - larger, but not that much better)So as I stewed on that info for a while, I kept going down the polls and found one that discussed cost per resident acquisition. As you can see, the average cost of acquisition was between $100 and $250 per new resident. So how much does that really translate into? Well, it's a little hard to say, but let's take the industry average of roughly 60 percent yearly turnover, a 150 unit property, and an average cost of acquisition of $175. If you average that out over a 12 month period, it comes out to $1,300 per month for marketing to prospects!So here you have residents who are already living there,......
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