By Eric Brown

Can the apartment industry benefit from benchmarking against other industry standards? Are the metrics that property management company’s use in sync with the changing world? Maybe what we have always done isn’t producing as favorable of a result as what we could with a paradigm shift. Brent William’s blog post about lease renewals and how they stack up against cell phone plan renewals has provoked contemplation on the topic. The cell phone companies have likely created a renewal model that does work better than a typical apartment renewal. The rent increase argument is flawed and can be diffused with an increased renewal percentage.  The cost of getting a unit market ready, leasing and marketing cost is far more than a rent increase. Rent increases are certainly required, but perhaps a more targeted approach would provide a better yield.  The whole concept is convoluted, on one hand we ask for a rent increase, and on the other hand sometimes give away something to secure the renewal.

What if the apartment leases self renewed, similar to the cell phone renewal policy. What if the burden to terminate the lease was solely on the resident and we didn’t talk about it much after the lease signing? What if you redeployed the savings from managing the renewal process to a planned and systematic series of surprises? Change the lease term to something other than a standard twelve months, so with one auto renewal, the property exceeded the typical 50% or 60% retention target. How it is ever OK to say that half or close to half of your customer base is turning over year after year. It isn’t OK, and we should find an innovative way to solve this.

The current thinking and training may be flawed.

Ideas, comments, thoughts, we would love to hear them.  

You can check out Brent’s blog post here

Stopping the Buying Mode

Are you getting the result you want? It is my belief in life that we really do “Teach people how to treat us”, and to add to Mike’s Post, we teach our residents how to pay their rent.

At Urbane, Rent is due on the first and late on the second. We assess and enforce a $50 Late Fee on the second and a $100 late fee on the fifth. If rent is not paid by the sixth, Seven Day Notices, including legal fees are prepared and processed. We work hard to have non paying residents evicted from the apartment within a fifty day window, pending how quickly our court cases come, which limits and deceases our exposure.

There are certainly exceptions, but not very many. Our lender doesn’t accept any exceptions regarding our mortgage payments. Some may think this is too harsh, but being a Start Up Company, approaching our five year anniversary, we simply did not, do not have the cash flow luxury of making loans to residents, because when they do not pay on time, that’s what happens, the management company has agreed, by default to loan them money.

I can tell you too, that we do not get any push back on this topic. It is made clear at the lease signing, and just isn’t a problem. But to have effective and prompt collections, one must also be on their game regarding Credit and Background Checks, and be disciplined enough, even in a high vacancy situation to turn away questionable credit history. There certainly are lots of schools of thought on who should be approved and who not, regarding credit and payment history, and we would love to hear your feedback and experience as to what works and what has not for your property.

Mike, to further your point, Ning is likely the coolest single Social Media tool to come out yet, We are launching our Ning Site, tomorrow which will be imbedded into our Web Site and will be a main feature of our Home Page, Here’s the direct link for a sneak peak: http://urbaneapartments.ning.com/, We have scraped our existing Bulletin Board Forum, as it was boring and was not drawing enough comments. Diane has done an outstanding job creating this Ning site for us. It is like having your own My Space site, and …it is free. Chris Anderson maybe on to something here………….

Our thought and direction is this, We have ceased ALL Paid Advertising, both Print Ads and On Line Ads, No Paid Advertising, We believe that Craig’s List is much more effective, for our demographic than any paid for advertising, and coupled with My Space, FaceBook, Twitter, Plurk and all of the other free sites, Marketing and Branding efforts and direction have changed. It is not how it used to be. While this may be a radical approach, which may or may not work, We are focusing all of our Marketing and Branding efforts inward, and focused on our existing Resident Base, tapping first our Influencers to foster creating Urbane Evangelist and Community. Our web site comes up on page one of a local Google Search for apartments, and if we can create and sustain enough buzz from this new Social Media, What if the Apartments and Features became Secondary, and you drove so much traffic to your Web Site because of the Social Media Value that both your Residents and future Residents found, that they just had to live at your property. That is our focus, and we are dove tailing several innovative ideas into this program, such as our Virtual Leasing Consultant, and Centralized Leasing Center which I will provide more detailed blog posts herein in the days ahead to share with the community and readers. Our new direction may or may not work, but I am gambling it will, and That Business as Usual may Never be the Same,

How does the saying go; “Put your money where your mouth is” What if we really did that, and really did Turn Inward, Focus a significant portion of our Marketing and Branding budgets and resources on our existing Resident Base, and create a campaign where our Residents Leased Apartments for us?

I think that you start by targeting The Influencers, which every brand has, even no brands, however one of the huge benefits of Social Media, is it is much easier to “listen for them” They are the ones leaving comments on your MySpace page, channeling folks to your Facebook page, taking pictures of your properties and putting them on Flickr, just because they thought the building had some cool features, they are the Complainers that care enough to complain, and Love You when you Listen, and Love You even more when you do something about it. Those are The Influencers, and I believe that when You Lead Your Influencers they become Evangelists.

If this What If works, the resources are really leveraged then, and much has been done more to enhance the existing residents experience, thus they are happier and they are promoting the product, just how many of them would you need to not have to look outward for any rentals?