Archive for marketing
Marketing and advertising, though many use the terms as if they mean the same thing, are really different. Advertising is a function of marketing, but marketing is a broader planned approach to positioning an apartment or multifamily property in the local marketplace.
Advertising includes the ways in which the property is presented to the prospective rental pool in a way that follows the marketing plan.
Marketing for Apartment & Multifamily Properties
Taking some niche examples, what might a marketing plan contain for an apartment or multifamily property? First, it will be identification of the target prospect or renter who would be most likely to want to live in the project.
This includes looking at the “why” that could be location, amenities or size and layout. Once this is determined, a marketing plan can be put into play.
· Taking the top couple of reasons renters would like this property from the research above, examine where these prospects live now, work, and places frequented for entertainment.
· If it’s an age group, this could point out marketing approaches and advertising media later that would appeal, such as focusing on modern and online access for younger, or convenience and ease of access for older prospects.
· Location is easy, as a college or major technology employer that’s providing the prospects can be the main source of tenants, thus a focus for marketing efforts.
Advertising for Successful Apartment & Multifamily Marketing
Once a marketing plan is in place, the methods used to advertise for tenants will be determined based on their ability to reach the best prospects at the lowest cost.
There are a great many ways to advertise apartments & multifamily properties, and just as many differences in reach, cost and results. Media sales people have a job to do, but just taking demographics in a sales presentation at face value could be costly and ineffective.
· Young professionals could be targeted quite well with a website and search engine presence.
· Those same young professionals, as well as college students, use Craigslist a lot, so it’s a great free advertising resource.
· College bulletin boards, and the same for large employers and institutions are another free resource that works.
· Large employer or institution newsletters may offer ad space.
· Of course, all of the traditional media, TV, radio, newspaper, and magazine can be effective. But, have the ad sales person show hard numbers for the number of prospects that fit the marketing plan.
Marketing & advertising for apartment & multifamily properties can be very cost effective with a plan and careful media selection.
I’ll share more with you soon…
Warm Regards,
Karen Hanover, CCIM Candidate
Apartment Education Institute, President
Marketing and advertising for apartment & multifamily properties takes many forms in many media. Promotion is generally accepted to be different in that it is some concession or give-away as opposed to an ad in print or other media.
In today’s Internet world, some marketers consider a website as a crossover, in that it can be considered advertising, but also promotion, with the ability to offer specials and other incentives to prospective tenants.
Free Rent for Apartment & Multifamily Promotion
There’s not a lot of originality in this approach, but many use it, as rent concessions can fill units. The trick to doing it right is to balance the cash flow negative with the occupancy positive. “Free Rent” promotions abound when markets get soft and there’s more competition for tenants.
One consideration is the balance between how much free rent and the length of the lease. There are apartment & multifamily renters out there that jump from “free rent” deal to the another, as their moving costs are low.
One month free on a six month lease may be acceptable, but two months on a twelve month lease could be better, as the prep costs to get tenant ready for the next one run up the costs of this type of promotion.
That’s a cost some owners forget in free rent promotions. It’s not just the income that’s given away, but also the cost of getting the unit tenant-ready when there’s a move-out. One month free on a six month lease can result in two vacancies next year, and a month or more of rent lost as expense in getting the unit re-occupied.
Prospective tenants who respond well to free rent promotions can be living paycheck-to-paycheck, and like the idea of a break from rent during the lease. A bit like forced savings, adding $30-$50/month to the rent might not deter them, as they’re looking more at the big cash infusion the skipped month brings.
Another use for free rent promotions is tenant retention. A free month for a new lease might be an excellent tactic, as the costs to get a new tenant into the unit are that much or more anyway.
The Internet for Promotion
The Web shouldn’t be overlooked for apartment & multifamily promotion. The vast majority of renters out there are active on the Web, Facebook, Twitter, and other social and business networks. Creating a website, and offering specials and promotions there will be less expensive than other media, and can be more effective.
I’ll share more with you soon…
Warm Regards,
Karen Hanover, CCIM Candidate
Apartment Education Institute, President
It’s all about cash flow in apartment & multifamily investment. From the valuation of the property with cash flow analysis to the determination of the mortgage amount with cash flow and DSCR (Debt Service Coverage Ratio), it’s the cash flow that determines the value of the deal.
Since property management costs, and the costs of other items on the expense side are controlled by management, it’s crucial to have a good management staff and plan. Without that, it’s easy to see where a commercial foreclosure may become a reality.
Legal and Accounting
Good legal counsel should always be available, whether on retainer or just on-call. From planning and selection of forms for applications and tenant interviews to careful preparation for and performance of the deliveries and documents for eviction, legal help is important. One lawsuit for improper eviction can wipe out a year’s profits.
Accounting isn’t just number-crunching. It’s also tax planning and budgeting to maximize that all-important cash flow. The tax planning can help to subsidize other investments as well. Selection of the right accountant contributes to ongoing management profits throughout the holding period.
Cleaning, Landscaping & General Maintenance
The people hired to clean units between tenants, do landscaping work, as well as general minor maintenance tasks, can set the tone for tenant satisfaction. Arriving home from work to a well-maintained project, with inviting common areas, can contribute to tenant retention, and possibly allow higher rents than competitive properties.
Tenant Relations
Tenant relations encompasses a number of important points of interaction between management and the customer…the tenant. With today’s busy lifestyle, there is little patience on the part of tenants in accepting problems with their home.
From making it easy to reach management with problems, to prompt correction and repairs, tenant satisfaction is critical to profitability. Even if a new one is placed quickly, the loss of a tenant due to management problems increases costs of operation in readying the unit for the new tenant.
Word-of-mouth marketing shouldn’t be undervalued. Happy tenants tell others. They also have friends who will at some point be in the moving mood.
Significant savings in marketing and advertising costs can be attributed to tenants bringing others to the project. Some owners offer a small rent offset as a thank you for a tenant referral. Keeping tenants happy contributes to cash flow.
Apartment & multifamily project management is a significant component on the cost side, but also an important piece of the income side when done properly.
I’ll share more with you soon…
Warm Regards,
Karen Hanover, CCIM Candidate
Apartment Education Institute, President
