What can we say about the phrase “Lease The Unit”. What comes to mind is the word “Occupancy”. In order to have occupants in our units, we must first have “traffic”. This consists of telephone inquiries, walk-ins, referrals from professional apartment leasing companies, folks that drive by our property, etc. In my experience, leasing is a numbers game: If we have traffic of 4 “walk-ins” today, how many should sign a lease? 2,1,3? Historical records show that the average over time is 25% (this is known as the “capture ratio”). So, if we have 3 walk-ins, 5 telephone inquiries and 2 calls from folks that saw us on Zillow, and we actually took 2 applications (with deposits), what was our capture ratio?
Homer Kat says:
There are professional leasing companies that will contract with you to lease up your vacancies at a set price per leased unit and will guarantee X number of leases over a predetermined time period. Their “capture ratio” can be as high as 75% !!
We will continue this thread at our next post
****** NOTE: This subject will continue as it is the first subject of the 4 pillars of management
January 12, 2016:
Lets continue this thread by looking at other methods of directing traffic to your property.There are many and varied vehicles with which to spread the message about your property. Advertising is a huge industry and can be confusing with regard to content, placement, cost factors, etc. A productive ad whether it is a print ad (newspaper, magazine, handout etc), radio or TV ad, incentive ad (coupons etc), or just plain old canvassing in person (don’t snicker, it WORKS!), has to produce prospects to your door.
“I placed a classified ad in the local newspaper to run for 30 days. How do I know if it’s working?” Well first, the ad needs to be concise, informative, but short (display ads are expensive and usually not cost effective). When someone calls or stops in for information about your rental, you must ask “how did you hear about us?” Keep a written record of calls and walk-ins with dates and times, call back information etc. Now here’s the good part.
Suppose you had 14 calls and 6 walk in prospects from this 30 day ad, and the ad cost was $200. Soooo….. your cost per prospect is $10. Using an average “capture ratio” of 25% would mean you should have rented 5 units. Your cost per lease for the ad is $40. Taking this a step further: If your average monthly rent is $900, then the advertising cost per unit leased is approximately 4.5% of the first months rent. This will transfer right into your projected annual budget….. (be sure to stay with us as we get into finance later on).
Homer says: Stay tuned! We will discuss what is an “Area Blitz” in the next post.
March 7, 2016: “Area Blitz”
This is a great way to “get the word out” in your immediate area (and beyond if you’re up for it). If you don’t already have them, design a flyer, or handout that hits the high points for your property. It doesn’t have to cost a fortune, just make sure it is well done and only one page (two sided is ok). Then make a list of ALL the businesses in your area (try your local Multiple Listing Service at the Board of Realtors, they use a numbered system for the SMSA areas) and devise a mapped out plan to call on every business.Use your local business directory. You can call on the larger ones first and work down, or divide the list by location and work each area out that way, whatever you choose.
Your handout should include the basics:
- Where your property is located
- Types and sizes of units
- School District
- Rent price range
- A couple of good color photos
- A couple of short reviews from Residents (use first name only)
- Include an incentive if they bring the flyer when they visit the property
When you get a lease from a flyer, take some pizza coupons to the business that it came from! Follow up with a call to the business and continue to follow up with them. It’s like having an extra leasing person talking about your property!
HOMER SAYS: Try this idea, IT WORKS!
Next up: How “curb appeal” plays a HUGE role in leasing !!
May 2, 2016 – What is “CURB APPEAL”?
On my list of the 5 categories (in order) of maintenance on a property, can you guess what comes in at No.2?………How many of you guessed Curb Appeal?
Curb appeal is the most important ingredient in leasing. No, we cannot lease units that aren’t ready….Yes we must advertise. But, when a prospect that has seen our newspaper ad, or our billboard, or our coupon in “For Rent” Magazine goes driving by your property, will they drive on past, will they circle thru and leave, or will they park and come in for more information and a tour?? You know the answer. If you have doubts, read on!
Curb appeal is your :
- Driveways and curbs
- Trees, lawns, shrubs and FLOWERS
- Common areas – Walks, play areas, dog parks, pool, fitness center
- Doorways, breezeways and stairs
Last, but not least, your OFFICE! Leave no stone unturned in your quest for the best curb appeal in town! When you drive into your property every morning for work, drive on around and check it out. It takes only a minute or two, but you might be surprised at what you see! Good or bad? Don’t let anything sneak up on you. You never know who might drive your property today! Leasing is a numbers game (I know I harp on this, but facts are facts). The more visitors that drive your property and come in, the better the odds of closing that prospect!