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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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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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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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Your residents are social online. Is your property?

It's no secret that one of the biggest trends in the multifamily industry is connecting to prospects and residents through the Internet. So here are a few bits of information from comScore Media Metrix that you can munch on: Social networking sites, such as MySpace and Facebook, received 121 million visitors during the month of October. To give a little context to that number, that represents over 66 percent of ALL Internet users during that time. Social networking has become mainstream and far beyond the expected 18 to 24 age demographic. So if your prospects and your residents hang out in this space, shouldn't you?
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The Evil of MySpace, Update 1

Today CNN.com gave me the best example of the argument I was making about how the media creates a distorted view of popular online destinations. Today it ran this headline on the front page of CNN.com:

"Craigslist used to find killer for hire"

For those who aren't familiar with Craigslist, it is essentially a free classified ad website. If you take a moment to look at the story, you'll soon realize that Craigslist didn't do anything wrong in the slightest. It reminds me of how people often tape items to light poles on well-traveled streets to advertise something, find a lost dog, etc. Now consider the absurdity of blaming the light pole if someone placed something on it that was inappropriate or illegal. I knew those light poles were no good! Tear them all down!

Ridiculous, right? But now a subconscious thought has been placed on every reader's mind that associates Craigslist with something illegal. Do that enough and guess what happens - the thought sticks.

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The Evil of MySpace?

For my very first day of blogging, I had a really amazing response, with over 50 views. I did have a couple of very interesting responses, specifically saying that they would read the blog if only it weren't on MySpace. I was told that MySpace had a bad reputation and it was considered too "juvenile". Let's first talk about the juvenile aspect. I bet it would shock you that over 50 percent of users were over the age of 35 (http://www.comscore.com/press/release.asp?press=1019). Granted, the data is a bit old, but that number amazed me. Second, let me deal with the issue of MySpace having a bad reputation.In the news recently, there have been plenty of stories regarding MySpace and crime, whether it be child predators or scams.  The problem with having this discussion about MySpace is that it always ultimately comes down to the argument that "crime happens everywhere." The problem with that argument is that it always seems to make crime seem like no big deal, but of course it IS a big deal if it happens to you! But ultimately, despite the crime, people don't lock themselves into a bunker every day because of the fear of the scary world around them. No, instead they become aware of their surroundings and take appropriate precautions. MySpace is just another "world" to take the proper precautions in, and it happens to be much safer than the real world in which you live! Consider this: MySpace has a "population" approximately 1/3 of the......
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Rent Concession Madness

So what are the costs of price cutting? This is a good article discussing the long-term impact of continuously reducing prices (http://www.newswise.com/articles/view/537141/?sc=dwtr). One of the pieces of advice: "Retain loyal customers through nonprice, value-added components, and limit discounts to entice new buyers or brand switchers."I could probably write for days about the rent concession trap, as it goes beyond just lower rents in the short term, but also severely impacts retention down the road. A rent concession is normally given in full for a new resident, right? Well, this new resident ends up having the "newest" apartment, as well, with newer carpet and newer paint. So you are giving your best product away for the least amount of money! So let's take a look at this from an existing resident's point of view: They just got the renewal letter, which is asking for a $50 hike in their monthly rent, which means they are now paying $50 more for an apartment that is yet another year "older", even though they have been a loyal customer. If they move, they can probably get a "newer" apartment for less money than their renewal rate. Considering the cost of turning over an apartment, the existing resident is also worth more than a new resident to the property. So in the end, we are giving our best product at the lowest cost to the least profitable renter. Simultaneously, we are pushing out our most profitable residents by charging them a higher rent for a less......
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Farmers Branch Is At It Again!!

Farmers Branch, a suburb of Dallas, Texas, is again trying to halt illegal immigrants living at its apartment communities. As opposed to previous attempts that put the duty of verifying citizenship squarely on the shoulders of the apartment community, this new ordinance would require adults looking to rent in Farmers Branch to get an "Occupancy License" from the city. This would entail renters providing the city information regarding their legal status, which would be checked against a federal database. This new ordinance definitely shifts the burden away from the landlord, although it's still unclear if any fees would be applied to either the renter or landlord. If this ordinance succeeds, don't be surprised if other cities follow the lead!


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