Apartment Budgeting: Corporate Rent Premium

Corporate Rent Premiums are convenience fees added to your Apartment’s Market Rent.

Over the last couple of weeks we have discussed premiums that apply to such things as Month to Month Leases and Short Term Leases. Today we take a similar angle in the Apartment Budgeting Series as we are penning on the subject of Corporate Rent Premium. In the spirit of consistency, we will start by putting some definition around the term and then we will dig into some budget strategy and possibly some thoughts on marketing.The Boulders at Katy Trail in Missouri

Corporate Rent Premium Defined

Corporate Rent Premiums are convenience fees added to your Apartment’s Market Rent. It is a little bit different from the last two fees that we penned about. In this case,  apartments are generally leased and paid for by third-party agencies.  National Corporate Housing and Oakwood are a few examples of the aforementioned third parties. You, in a sense, up charge the agency for the convenience of getting out of the lease(s) with just a standard 30 or 60 day notice.

I have seen the fee applied by way of flat rates and/or percentages with upsides of $300 or 10% of the market rate.

Corporate Rent Premium Budget Strategy

Like all other rent premiums this can be a tricky thing to budget for and it definitely something you want to control. To budget, I would refer to a twelve month trailing all the while considering current economic conditions. If the economy as a whole is downtrodden that the likely hood of a boom of corporate leases landing in your lap is between nil and none. If the economy is gaining traction and or booming you will likely see this business experience an uptick. But, it is always open-ended.

Remember to control this. I can’t tell you how many times I have sat in an owner’s meeting trying to remind them of their generosity in giving up 20% of their unit count to a corporate housing provider only to have that provider pull the rug out from under them. How quickly it becomes the other’s guys hot potato to deal with and explain. 5% is a good number to manage. 10% is pushing the risk handle. Anything beyond that is pure gamble in my book.

Corporate Housing Marketing Strategy

No ballyhoo with this one. It’s a simple down to earth Dale Carnegie approach to getting your foot in the door. Do a little research and find out what the owners and account executives grapple with. What are the biggest problems that they deal with? What keeps them up at night? What rattles their brain(s)? Get into that in the way of solutions. Solutions that you can play into their real-time business transactions and make sure your company and community are associated in some way. Be swift with any help that you can give to them. And, don’t be shy about asking for the business.

Your always looking for some premium to rent multifamily maniac,

M

Apartment Budgeting: Lease/Short Term Premium

Back for another week of budget talk. Hope this past week has been over the top and amazing for all of you. If  not, you have a whole life of potential in front of you so don’t fret too much. Last week we talked about Month to Month Premiums and this week are moving on to Apartment Budgeting: Lease/Short Term Premium.

Lease/Short Term Premium Defined

Lease/Short Term Premium is a fee that is added to any lease that is less than the desired six, nine or twelve month lease that most of us non-revenue management practitioners desire. Call is a fee of convenience if you will. It allows a resident to have flexibility in the way of getting out of the lease contract without any lease break penalties. It is a simple month to month premium that you tack on at the initiation of the lease term.

I have seen this fee applied in the way of a flat fee ranging from $50 to $100/mo. And, I have seen it applied as a percentage of the lease rate ranging from 5% to 10%/mo.

Lease/Short Term Premium Budgeting StrategyPremium for short term apartment lease

I typically consult a twelve month trailing report to determine what my forward-looking twelve month budget number should be. This is again one of those fees that is very hard to budget for given the fact that is simply random in nature. Unless you are located in a somewhat urban area with a propensity to attract corporate type clientele, you will rarely book income to this line item.

Marketing Short Term Leases

Don’t forget that everything is marketing. And, this line item should prompt you to look for marketing opportunities. Use Short Term Leases as a bullet point on your website. But, don’t get too crazy as you don’t want to create unwanted exposure. But, it would not be a bad idea to let two to three percent of your unit count produce some extra revenue.

Your looking for opportunity in every line item multifamily maniac,

M

 

Multifamily Monday: SBWA

How many of you get lazy and don’t walk your apartment properties as often as you should?

SBWA Supervising By Walking AroundWhat are we talking about on this Multifamily Monday? SBWA. What is SBWA. Supervising By Walking Around.

How many of you get lazy and don’t walk your apartment properties as often as you should? How many of you get lazy and do not walk your market ready product? How many of you get lazy and do not inspect what you expect of your teams.

Don’t be shy.

If it helps, I will admit that I am as guilty of this as much as the next guy/gal. At times, it is simply out of a haste to get on to the next thing that is calling my attention. Other times, it is simply just being lazy.

I admit it not for the reason of calling you or myself out but simply as a matter of getting it imbued in your mind. You, we must do it. It is fundamental to our business. It is what keeps us all true to our standards. If you are not looking at what you expect those standards fall pretty fast. I think we would agree.

Supervising By Walking Around

I wrote a piece on this concept back in the Spring of 2011. At the time my posit was that you could not know your people and or your business if you did not spend any time wondering around in it. Not my novel concept but one made famous in the world of leadership and management by Tom Peters (side note: you could consider me a super-fan of Mr. Peters).

To the Point

Since the purpose of the Multifamily Monday series is to be short and to the point – here it is.

Get our of your office today and walk around your community. Walk alone. Walk with the people in your office. Walk with your service team. Walk with someone that might be moving in soon. Walk with the cable guy. Walk with the landscaper. Walk with someone that currently lives in your community. Walk with a police officer. Walk with a Mom. Walk with a Dad.

GET Up – Walk NOW

Your SBWA multifamily manic,

M

Using Social Media to Market Apartments Redux

Assiduity – constant or close attention to what one is doing.

Back in 2009 I penned a post about using social media to market apartments. Back then the groundswell was happening and everyone had an opinion about it. And, over the past three years, I think we have all learned a lot. Some of it good. Some of it bad. Some have taken the lessons and left the conversation. Others have bet the farm. While others dipped their toe in, listened, learned, participated, grew and are now providing real value. And, while we were all quietly churning away in our social media bull pens another more than mentionable groundswell was taking place. Fewer multifamily starts and a generation ripe with numbers that we have not seen since the baby boomers hit the scene.

Fast-forward to the second half of 2012, the coastal markets are booming again while the somewhat insulated Midwest lays in wait. In St. Louis specifically, most sub-markets that have hit bottom and are now bouncing along. Some city central, mid-city and west county properties are sporting occupancy gains and rent growth they have not seen in three years plus.

Get these two things (marketing apartments using social media and the near perfect storm of fundamental metrics) in a room together and you have the makings of a home run. At least in my opinion.

Not Using Social Media to Market Apartments?

Now might be a good time to rethink that position. Don’t take my word for it. Take a look at this recent post over at Business Grow (a great blog by the way – subscribe and read every word). I pulled out a quote that I think speaks to my real point.

If you think about, using social media at the university level is the perfect test case for what all our organizations may be seeing just a few years from now:

  • Its primary audience uses the social web as its primary tool for communication.
  • It is an essential strategy for connecting with, and nurturing, its “customers.”
  • The relatively low-cost effectiveness of social media fits with programs under constant budget pressures.

Assiduity and The Why Behind the What

How many of you knew what that word meant? Me either. But, I fell in love when I looked it up. Assiduity – constant or close attention to what one is doing. As I read the word then the definition and then the word again it made me think – get off your ass-n-do-it.

To the point: your near now, now and future residents are growing up digital. Miss the point and miss some real opportunity.

Your big believer in using social media to market apartments,

M

 

Apartment Marketing: Google Now

I am moving our normally scheduled budget post to Wednesday. My apologies to you that were expecting some number crunching today.

Google NowApartment Marketing with Google Now

Imagine a day when Google understands your interests so much so that it recommends a new apartment living experience. Maybe that is predicated on the fact that you a value shopper in all other areas of your life – Google might recommend a cheaper place to live. Suppose you are a social butterfly who often frequents downtown hotspots but you live in the burbs. Google might refer you to a nice new downtown apartment community.

Google Now’s Personalized Search With Automated Results: Creepy Or The Future Of Search? | Fast Company

The information from Google Now is displayed on what Barra referred to as “cards,” tile-sized amounts of information (seen above) that you might find similar to the cards seen in Palm’s WebOS software–think the default weather app on your iPhone.

Apartment Community Interest Graph

I am of the firm belief that the future of apartment search is going to be interest based and will come predictive in nature. And, I think that every apartment community should be working on their digital personality (read: get interesting). I think that apartment community reviews along with a plethora of other data points are going to be intermingled with neighborhood reviews (aggregate of every local business review in and around your community – sort of a neighborhood cool score: think walk-score) and that information is going to flow out in the “cards” described in the quote above. The key going forward will be positioning oneself as interesting.

Your keenly interested in interest graphs multifamily maniac,

M

 

Pic props: Android News

Apartment Podcasting Marketing

“For corporate marketers, podcasting is low-hanging fruit.” – Paul Gillin

Low Hanging Fruit

Caught this video over at businessgrow where Michael Stelzner of Social Media Examiner throws down his 18 to 24 month content marketing prediction. It’s an interesting thought and one that I am trying to wrap my head around as it relates to marketing apartments. His thought comes in near the end of the four-minute vid:

Your wondering about apartment podcast marketing multifamily manic,

M

 

Simple Timeline

In the absence of a simple timeline you get chaos. You get the finger-pointing. You get he said and she said and they said and we all said – time-sucks. It’s exhausting and it usually involves the highest of pay grades to solve.

Project Management for Apartment ProjectsLay it out – 

I heard a story this week (it was really a rant) about a broken system. The system existed between a project management team and an accounting team. As I listened (from a third-party removed perspective), it became clear to me that there was a fair amount of pre-work to include simple timelines did not exist.

Timelines

Simple maps that memorialize the steps between inception and conclusion. Simple steps put down on paper that capture the essence of letting out a contract for work to be done and the follow through to completion and payment for that work.

In the absence of a simple timeline you get chaos. You get the finger-pointing. You get he said and she said and they said and we all said – time-sucks. It’s exhausting and it usually involves the highest of pay grades to solve.

Creating an Apartment Project Timeline

1. Budget

2. Bid work (even though you have a budget, do the bid work)

3. Make sure the money is there (remember your apartment community budget was written months ago – in some cases many months ago). If the property is not performing to budget – the project may need to be put on a shelf.

*Item of note – don’t skip #3, it is where 99% of the problems can be traced back to

4. Put together a simple vendor list – who is working on the job, telephone number, lead (accounting contact), roughly what they are to be paid and when

5. Host a project launch meeting (in person if possible, by phone if not). Invite the property manager, maintenance supervisor, every vendor involved and your accountant

6. Give a weekly check-in update (via email or by phone whereby the above team calls in)

7. Wrap it up – tie up the loose ends and deliver the product

8. Host a post-mortem for every project no matter the scope. This is where you create excellence. Set the stage for an unadulterated conversation and tear apart the good the bad and the ugly of the project. Have your simple timeline laying in front of everyone and up on a computer screen for all to see. Have it set in an edit mode and change it (for the good) right there on the spot.

No system is perfect but every system should be evolving at all times.

Your counting on simple timelines all the time multifamily manic,

M


Exaggerated Response

To the point: over-communicate

Do it in an Exaggerated Way

Quick story for your Monday morning reading pleasure. I can’t recall where and when I read this but it has been some time. The story made an impact on me because it was – in my mind – an exaggerated response to an otherwise routine request for service.

The story was about a plumbing company that made over doing it a part of their service routine. If they were called out to unclog a drain, they took the time to tidy up the space under the sink, mop the floor and vacuum the floor mats. And, get this – they cleaned up any and all dirty dishes in and around the sink. Whoa! #gameon

People are the Difference that Makes a Difference

If people are the difference then suffice it to say that their actions and behaviors are the tell. Are you acting and behaving in a manner that is exaggerated? Do you take projects beyond what is expected? Do you push your team to do the same?

The point after the point: do something today that rocks the socks off of the people who you serve.

Your looking to over-exaggerate my responses multifamily manic

M

Cold Calling – New and Improved

I am consistently baffled by cold calling efforts in a business climate that has turned radically social. Vendors can get to know anyone on the planet by simply dialing into twitter, facebook, linkedin or otherwise. And, if they take the time to set back and listen, dive in and participate, provide value, give and take feedback and over a bit of time – sometimes a very long bit of time (@30lines took the time) (@jonathansaar took the time) they earn business. key word being ‘earn.’ Mike and Jonathan respectfully spent the better part of two years nurturing a relationship with Mills Properties and it has paid off in a good way for them. And, equally important to this point – the time they invested has been equally rewarding for Mills.

Cold Calling Giving Way to Cold Email

The following approach via the ‘contact us’ button our company website bakes my insides every time –

Hello,

I wanted to take a moment of your time to introduce myself and [don’t want to or am afraid to reach out via other more appropriate media – Graphics]. We are printers and graphic designers long specializing (since 19##) in the Multi-Family and Senior Housing industry.

We have lowered the prices on our FULL COLOR Marketing Business Cards!
500 = $50.00*
1,000 = $65.00*
2,500 = $110.00*
5,000 = $180.00*

Prices DO NOT include Taxes, Shipping, Redrawing or Creation of a Logo.
Marketing Business Cards

Great low budget marketing tool!Cold Email Apartment Vendor Marketing

This product’s features include:
square corners
2 sided cards same price as one sided
your choice of 3 types of paper:
14pt uncoated cover – traditional, non-shiny paper
14pt matte coated cover – satin finish
14pt coated cover with UV – very shiny
I invite you to check out our newly revamped website at [www.imacoldcaller].

Multi-Family and Student Housing Specialists.
Long the focus of ***, our multi-family clients will love the extensive on-line shopping experience afforded by this new store. Printing, promotional products, signage, and more are offered here in an easy-to-order format, tailored for your industry.

Promotional Products. Easy On-Line Ordering.
All of our customers can pick and choose from over #00,000 advertising specialty/promotional products. Shopping has never been so easy.

Let me know if there is ANYTHING I can help you with.

Man I Don’t Like Cold Calling
Project Consultant at ***** Graphics

******, ** *****
Office
Cell
Fax
email

The ONLY THING you can help me with is – helping me understand why this approach to business seems at all appropriate in today’s business climate?

Your – ranting on cold callers – multifamily manic,

M