Apartment Property Management Case Study
If a stranger would have walked up to me two months ago and said, “I can take your apartment complex from 65% to 100% occupancy in lessthan 30 days,” I wouldn’t have believed them.
If that same person would have then said, “And it will cost you less than $200,” I probably would have laughed and walked away. But that is exactly what happened when we took over the management of an apartment complex recently.
These numbers might look like something out of a fairy tale, but they’re not. I can assure you that they are true and verifiable. We actually did better than that!
What would have been unthinkable over 60 days ago has actually happened. We successfully leased the property from 65% to 100% in less than a month, and that’s only the tip of the iceberg.
On that same property we are now at 100% occupancy. We have 100% collections and a 10 person waiting list. We even raised rents by 5% per month. Even better, the people on our waiting list are willing to pay us an additional $25-$50 per unit per month on new leases. Life is good.
If you’ve read this far you are probably wondering, “In this economy, that can’t happen, can it?”
I can tell you that that’s precisely what we did, and how we did it.
There wasn’t a magic formula – what it took was hard work, consistency, and a new approach to how the property was being marketed and leased.
So, how did we do it?
Before taking over the management of the property, we took a hard look at how the property was being presented to potential tenants and what was going on in the market.
We took a step into our leasing prospect’s shoes and at their current experience when leasing the apartments. We wanted to know how their inquiries were being handled, what kind of marketing materials were being used and where the current management company was advertising. What we found was not uncommon, and explained the lack of results.
Like many property management companies trying to fill their vacancies, this company purchased several advertisements in expensive publications, put a sign in the ground and waited. But not enough people were calling, and even more were moving out.
After analyzing the potential tenant’s rental experience, it was easy to see why.
When prospects called in, they got a voicemail or they talked to someone who didn’t know the property. What was even worse, if the prospect wanted to see the property that day, the management company would schedule the visit out several days so they would only have to take one trip to the property. A high percentage of the tenants were committing to a lease somewhere else in the meantime.
The pictures used in the advertising were not flattering. They were dark, dreary and definitely did not look like a welcoming place to live. They failed to bring out the property’s positive attributes, which the prospect would have loved.
When leads called into the management company from the advertisements, there was no way of telling where they came from or which ads were working. There was no way to duplicate successful advertisements or calculate how much the leads cost. Money was being wasted.
The next step was completing a market rental survey. In the survey we collected lease rates of comparable and competing properties in the area to determine market lease rates. After performing the survey, we determined that rental rates could be raised by at least $25 per month, and we raised our rental rates on new leases.
After analyzing everything that had been done under the previous management, we made the following changes that turned the property around:
First, we rebranded the marketing of the property. We replaced the old pictures that had cloudy, grey skies with bright pictures of blue skies, flowers, etc. that showed off the property’s best features. The interior pictures were replaced with pictures highlighting the best features of the bathroom, kitchen, living room and bedrooms.
We rewrote all the advertisements, highlighting key areas, and put up a quick website for the property where a prospect could easily get more information.
After analyzing the advertising performance and where the potential tenants came from, we quickly stopped all paid advertising to focus on free advertising that targeted the same prospect base. We focused on the advertising that had resulted in the most signed leases. Every potential prospect’s lead source was tracked and successful advertisements were duplicated. This allowed us to save over $500 per month in advertising and actually increased site visits and calls.
Next, we set up the property with its own phone number that rang directly to one of our leasing agents. The leasing agent’s job was to take calls from potential tenants quickly and set up appointments to view the property. The leasing agent worked around the prospect’s schedule, even if that meant staying late to show an apartment to a prospect. The prospect came first.
Once the prospect arrived on site, they were welcomed by our leasing agent. Then they were directed to a mini-model (see mini-model article), where we made a great first impression. From there, we had prospects fill out the rental application while in the model apartment. Once the prospect cleared the background check, we leased them the apartment.
Total cost per lead = zero.
Oh, and about that $200 spent on advertising… The property is located near two very busy intersections, but cannot be seen from the street due to thick trees. To take advantage of the traffic, we printed bandit signs (18″ x 24″ signs) to place in busy intersections to drive new prospects to our property. We paid $200 to have fifty signs produced. Funny thing is, we never used them because the other advertising was so effective.
A few other things you are probably wondering about: During leasing, no rental concessions were offered. Rents were increased by $25 per month to new tenants. Rent collections reached 100% and the rental income increased by over $8000 per month.
Since reaching 100% occupancy, calls keep coming in. A waiting list was started that has grown to over ten potential tenants who are willing to pay $25-$50 more per month more than the current rates to live there.
Following this process consistently for 3 weeks, we leased 16 apartments, taking the property from 65% to 100% occupancy. The collections have increased by over $8,000 per month and the bottom line has never looked better.
Keys to success:
- Know the market & your ideal tenants
- Get rid of problem tenants & those who do not pay their rent
- Be responsive: work on their schedule, not yours.
- Display your property in the best light possible
For more information on Cullor’s Property Management Services, please click here