We all are working very differently in 2020. And similar to other industries, the multifamily industry continues to band together to share best practices for ultimate efficiency serving everyone from owners to residents and everyone in between, including our incredibly resilient onsite teams! The past two months our Cadence Connect team has hosted informal discussions around everything from what resident events could look like to how to conduct self-guided tours. If you missed the most recent Cadence Connect Online event mid-July, here’s your quick recap!
We connected with a well-rounded group of multifamily marketers for a one hour online chat to cope with and collaborate on the constant change affecting our properties. Here’s what we covered and some pro tips to support you!
Topics hot on our radar:
Market Watch - Urban vs. Suburban
Suburban is doing fine. Are downtowners flocking to the suburbs? Yes, just starting to see this trend.
Student housing is doing well, better than expected with roommates spreading out.
Urban (especially Mpls & St. Paul) is attracting new prospects, but losing leases out the back door.
Downtown markets aren’t as attractive to current residents who lived there to be close to work, restaurants, entertainment (most of which aren’t a factor in their neighborhood anymore).
Rates dropping 10-25% in some downtown areas with concessions on top of that.
Studios are sitting on the market longer and have rates that have dropped 10%+ over the past few months as renters look for larger floor plans.
Utilize frequent market surveys to watch pricing and concessions.
Apartmentfinder.com is a good ILS resource to see pricing changes reflected in ad listings.
Ask for details about where and why people are moving to and from your property. The more information you have, the better you can serve your customers.
Retention Strategies & Renewal Rates
Crime is causing residents to move to suburbs and/or buy homes.
Smaller units (studios) are sitting on the market much more than usual.
Residents looking for more space, and flexible to work from home options.
Many operators are renewing with no increase, and stretching lease terms as far out as possible.
Service and engagement are key to renewal.
Many operators are renewing with no increase.
Consider light unit upgrades in return for longer lease renewals (light fixtures, closet enhancements, carpet cleaning, etc).
Operators who elect to renew on month-to-month leases may face unpredictable vacancy swings through the next year; consider offering benefits for specific lease length renewals.
Offer generous lease referral rewards to keep residents referring. They are more likely to stay if they have friends/family in the property.
Encourage transfers to residents if they are outgrowing their current home.
Unexpected Vacancy & Eviction Moratorium
Crime is already an issue and is impacting decisions to rent.
Behavior of residents on site is difficult to manage without ability to evict, this is creating challenges for onsite teams (for example smoking at a non-smoking site).
Eviction moratorium was extended to mid-August, and may have additional restrictions, meaning that impact could be felt just as we approach winter when it’s difficult to re-rent.
Properties with higher income renters are faring well in rent payment. Others are facing significant vacancy when evictions are allowed.
Unemployment supplement is ending on 7/31 and will impact those who have lost jobs by potentially $2,400 per month.
Look for opportunities to put residents on payment plans as the unemployment benefit is lost.
Consider allowing residents who are behind many months to simply buy-out of the lease so you can offer it now to an incoming prospect.
Cash for keys is being offered by some owners to encourage silent non-payers to walk away from leases, enabling owners to re-rent sooner.
Start a waiting list for potentially available units; check with current residents who may be interested in a larger unit, or have relatives looking to live closer.
Concessions! Big concessions!
Concessions up to two months free on 12 months, and a sighting of up to 6 months free on 24 months are being offered across urban markets.
Some are even offering free parking for six months on top of months free.
Gift cards, free internet, food delivery accounts, etc are being used to attract leases.
Match your concession to your goal; whether that is to encourage prospects to move sooner, stay longer, or select certain unit types.
Watch the lease terms where you are offering concessions. For example, one month free on a 12 month lease starting in September leaves you with exposure again next fall.
When pushing hard for volume leases in a soft market, it’s even more important to stagger lease terms so you don’t end up in the same position a year from now.
Differentiate where you can with a concession that meets the goals of the renter (i.e. free internet is attractive if you work from home or are online schooling).
Thank you to those who shared and participated in the conversation! We’re all in this together! The conversation from this Cadence Connect Event was captured on video for those who were registered. Be sure to be a part of the next conversation by registering online for our September session (date TBD).