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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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The Great Grace Hill-ians

Well, I am in a great mood today because the fine folks at Grace Hill have asked to work on some polls for them! I am assuming most of you heard of this blog through Grace Hill, but if you are unfamiliar with them, definitely check out the website. It has great resources and a very active discussion board that I try to check out every single day.
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The Millennials Are Coming!

I am now scared. Very scared. And no, I did not just watch the latest Saw movie or one of my all-time favorites, Event Horizon. No, this movie scared the crud out of me. I know it is a tad long at almost 13 minutes, but this clip will be invaluable to you in understanding your leasing consultants, some of whom may be straight out of high school or just a few years beyond.

http://www.cbsnews.com/sections/i_video/main500251.shtml?id=3486473n

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GREAT Book Review and What It Means For Your Apartment Community

So as many of you may know, I am not a developer, having a background in Finance instead. But even though I don't handle the coding for AptConnect, I hate being ignorant on the subject. So I have decided to take up coding in my spare time, if only to have a basic understanding.So I started going through Amazon.com for the user reviews on certain books and had to share my favorite review so far. Hope you enjoy!This is the worst book I have ever read. It' s like reading a book on how to use a light switch over and over again even though you've already done it 1000 times. Does that make sense? Either way, I'm drunk and this book sucked and I still can't program. What a waste. Good lord.Sure swayed me!-------------------------------------------------------------------- [UPDATE 11/6/08     At first, I posted this as "Off-Topic", but as I read it again, I realized that there were some definite lessons to be learned from this situation!  First of all, it's another example of social networking and how it affects the view of your business.  This review identified the specific book, gave information directly to a "prospect", and ultimately influenced the prospects decision to buy.  Although sites like ApartmentRatings.com might be a thorn in your side, they aren't going away and they are providing a service your prospects care about.  Ignoring them is something you just can't afford to do.Going forward, it will be important to not only drive your good customers to leave their......
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Scammer Needs Scamming Lessons

I was looking around on Craigslist today and found this amusing post. It was a post by a property manager (the first part is the email from the scammer). I love how the property manager couldn't help with the apartment itself, but was happy to provide consulting on how to improve their scamming capabilities!Gloria Rollins wrote:Hello,Thanks for your reply.I am a chemist by profession and i am currently working with St. Mark's Hospital,28 North wick Park,Wat ford Road, Harrow,Middlesex HA1 3UJ,United Kingdom.I will be in the states for at least 6 months and during this period,i will be working with the United States Environmental Protection Agency on a private research work.My financier in the States will be responsible for the rent deposit ,so I will instruct him to send you the payment as soon as you give me the go ahead to.Due to the limited time that I have before my arrival,have make some arrangements with a furniture company to supply the home with furniture,so I will need you to provide me with the measurements of the living room and bedroom so that the furniture company can supply the unit with furniture that will fit in well.As regards the lease agreement,i want you to send it to me for my review,i will eventually have it filled and signed on my arrival in your place as I am of the opinion that such documents are best filled and signed physically.Let me know how to move ahead as i intend to complete this......
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Pulling Foreclosures Into The Fold

If you consistently read Grace Hill, you may already be up to date on this particular discussion, but for a moment I would like to talk about the foreclosure problem in the U.S. and how it affects our industry, in particular. Now, I must note that I am not well versed in the specifics of foreclosure proceedings, so if you notice some problems with this logic, please let me know. There are two facets to this argument in relation to accepting these people back into our apartments. The first relates to the foreclosure itself - some see these borrowers as those that do not respect the obligations of the loan; therefore, we cannot trust them to respect the obligations of any lease, either. The other aspect is that even if we adjusted our screening process for the foreclosure itself, the borrowers may have already wrecked their credit beyond repair.When dealing with the foreclosure itself, I think we should consider, as an industry, lessening the screening criteria to allow more of these displaced residents into our communities. This is a great way to take "market share" back from single family homes, by making our industry viewed as a compassionate alternative, which seamlessly fits into our other benefits of hassle free living. I don't buy the argument that these people are now destined to back out on every lease and loan they ever get. It just doesn't make any sense that there would suddenly be this many new people surface that don't respect......
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You mean you don’t want Grandma looking at your drunken pictures?

Being in the webspace, I often hear from multifamily industry members that either their residents aren't online or that only teens and tweens use social networking sites. Oh how they are wrong, much to the annoyance of those very teens. Apparently, mom, dad, and grandma have encroached upon Facebook and it isn't very "cool" to add them as a friend. http://www.news.com.au/technology/story/0,25642,23125981-5014239,00.html?from=mostpop

One interesting line in the article noted, "Or adults could back off and only use social networking to contact their own peers." Let's see a show of hands who think MySpace and Facebook are actually designed for users above the age of, let's say, 35 years old. (For those who can't see the hands, I'll answer for them - nobody thinks these websites are designed for these users!) Which makes an interesting point: Adults are swarming to these sites in droves, even though it really doesn't fit their specific needs. In fact, approximately half of MySpace users are over 35!  So again, if you think that your older demographics are not interested in social networking and becoming active online, think again!

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Why Exactly Are You Staying At Your Apartment?

It occurred to me tonight that every survey that I have ever seen in our industry regarding a resident's apartment decision related to why he or she decided to move. Rent increase? Maintenance problems? Rent concession at a competitor? Crime? I realized that this question tied in perfectly with the Hygiene Theory I blogged about earlier. Isn't this question about their basic expectations? If the move is controllable (i.e., not a job transfer, bankruptcy, ect), it likely means that either the community did not fulfill the basic expectations, meaning you were effectively pushing them out the door, or you didn't provide them reasons to stay, such as unique perks, amenities, or sense of community. But I've never seen a survey that asks, "Why exactly are you continuing to stay here?" With this question, you could almost place a value on a resident: For example, a resident who actually loves staying at your community is "worth" significantly more than a resident who only stays because his lease tells him he can't leave. Do your residents adore your community or are they only staying because they are too lazy to actually move?  If your resident retention plan relies upon the laziness of your residents, you might have a problem! In the end, this second question really tells you how satisfied your residents are where as the first question tells you how dissatisfied your move-outs were. As you now know, these are two completely different things! I realize that you could never actually pose that......
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Make Your Model Apartment Rock!

Want to set your model apartment apart from others? Make it a rock garden! http://www.baekdal.com/Design/Interior-Design/rock-cushions/

Thanks to Scott for this one.

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Hygiene Theory - Not as Scary as it Sounds!

As most of you will find out, this blog will not follow other publications with "neat ideas for a summer party." I always find those types of articles as just a band-aid to the problem of resident retention. Let me clarify: Even though I'm not a fan of the typical summer party, if it is part of a larger resident retention program it can sometimes work. However, if the only thing you provide is a yearly summer party, save your time and your money! So what is this blog about? Well, one of items that I find important is to really understand your community and, more imporantly, how your residents view it. I am a big believer in creating a resident retention program, not just a "cute" party every once and a while. In order to create this program, however, you really must understand what makes your residents satisfied and what community features do you have that can achieve that. A few years ago, I read about a concept called "Hygiene Theory", which was initially designed to help employers create employee satisfaction. The moment I read it a light bulb went off, and I realized how applicable this was to our own industry! So I wrote an article about it, published in the must-read MultifamilyPro magazine, and want to share it with you here. It's too long to include in this blog post, so please click the link. It will help you understand your residents expectations, as well as your employees'. I......
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