Residential Community Investment Tips for Economic Recovery
Posted on Fri, Jan 29, 2010
2009 was a tough year. Generally speaking occupancy went down, rents went down, and turn over went up. Concessions and vacancy loss went through the roof and your budgets went down like the Titanic.
Every economist has a slightly different spin on this new economy. But most seem to agree that vacancy and rents will continue to dip in 2010 with recovery not projected till third quarter of 2011. Many clients have reported that ownership has cut spending to offset losses but when do you stop saving and start investing?? Your communities are still assets. Ask yourself… “What will my property’s recovery be like if no investments are made between now and then?”
Investment strategies will be dramatically different property to property. However, there are a few leading industry trends emerging. Investments are being made in marketing, aesthetics (interior and exterior improvements, and not just two toned paint), retention (this is a big one), and higher education of your sales and management teams.
Let’s start with marketing. Henry Ford said it best… "A man who stops advertising to save money is like a man who stops a clock to save time"[1]. Move your dollars around and try new things. Remember… in marketing branding and exposure is valuable. Think of brands such as Coke, Wal*Mart, Big Lots and Pink Berry. Other than your traditional Internet Listing Services and print publications, consider banner ads on websites your residents shop on, display advertising on Google and Yahoo and Video Tours on YouTube. Track results on impressions, hits and traffic. Don’t rely on just a guest card, e-mails and phone calls. Consider a free tool, Google Analytics to track website behavior and ILS performance and remember to always negotiate contracts.
Curb appeal is your marketing window. Your communities could have the most affordable rents on the block and all the marketing it needs to generate interest but if it’s the most unsightly property in the neighborhood, no one is going to go in. There are many ways to improve a community’s curb appeal without breaking the bank. Take some time to look at other communities in the neighborhood that are spiffing up their curb appeal. Get three or more bids for every project and look to your local apartment associations for referrals to vendors you can trust.
Service and retention are also hot topics. Think about offering your residents more services at the community level. Happy residents don’t move unless they have too. Retaining your current residents with service related products will impact more than just renewals. Happy residents make for a more peaceful work environment for your staff, less staff turnover and less wear in tear on the building. Retain by providing new social engagements sponsored by the community. Think hotel (not motel) customer service.
At ActiveBuilding, we offer a great web based product focused on retention, communication and engagement. Remember that there is a new generations of renters graduating college shortly. This group is large and can’t imagine the world without the Internet and Internet based services. Is your resident office accessible from the web?
Finally, invest in your staff. Industries thrive when the knowledge and skills of the people evolve. Give your staff the tools they need by sending them to classes at local colleges that are relevant to their job functions. Sales people to sales training and so on. If they have not already obtained certification from industry organizations, there are great programs here too. In Los Angeles CAA-LA and AACSC have great property management specific classes available with membership.
In conclusion, stay focused, make smart investments and your recovery will come sooner than later. Remember… After every crash in our nation’s history is a great boom. Will you be ready??
[1] -Henry Ford, one of the most astute business people the world has ever seen, commenting on those who cut advertising during the Great Depression of the 1930's