Great Renting Tips! Go Slower, Improve Your Revenue and Reduce Your Costs

Often in the industry the we tend to focus on turning units more quickly with solid detailed background and credit checking as the key to efficient operation and management. However, sometimes actual performance is significantly different than might seem the case. The fact is this is one of those cases.

Study's show and I expect your own resident records will show you that the earlier prospects started looking and planning their household move decision the longer they remained (perhaps still remain) with your property as a resident. In fact, I expect that if you'll segment your residents according to how far in advance of signing the lease the longer you will find they were a stable renter. This shouldn't be surprising since for residents who are really viewing their renting decision as selecting a home rather than a way station will view this as one of the most important decision they will make in their day to day life. Individuals or families who devote the time to a well thought out long term decision logically and it turns out in fact choose a home that they are prepared to stay with.

As property owners and managers, this type resident offers superior value. There are several implications for the property and all of them are positive. First, longer term tenants means less turnover cost for make readies. Longer term residents are less burden on the leasing staff. These families take more pride in the neighborhood they have chosen and are more concerned about maintaining the quality of living. As a result, they are much more likely to report resident problems and property issues in a timely way.

Keep a few of these points in mind, depending on the market and type of unit the average make ready cost is between $1,500 and $4,000. A resident household that will stay in place for two, three, four, or even more years costs much less than a unit that is turning annually.

As a manager, I don't recommend simply throwing out the quick turns. Instead, I advocate adopting a leasing strategy that seeks to over time convert the project to long term residents with much greater resident stability. This implies creating incentives at the point of leasing for this type of resident that reward the early measure household search. For example, long term leases with more limited rent increases annually are a good tactic. Or, if they can offer a prior rent history that reflects this, offer a rent bonus on the term of the lease. This could be a small annual year end refund, a reduction in rate, etc. Next, have long term contract upgrade rewards that benefit you as the owner and them as the resident. For example, installing instant water heaters at the point of lease for units signing a two or more year lease or installing new energy efficient windows.

Property owners and managers putting these kinds of strategies and tactics in place are adopting approaches to simplify management and improve long term profits and profit margins.

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