@mbrewer
Apartment Loss to Lease – How do you book it?
In the spirit of the upcoming 2012 budget season; I wanted to recycle this post. This is a subject of much debate in our office and I am interested in what the industry thinks.
Loss to Lease
There is a question floating around our office along the lines of, “What do you book in loss to lease line of your budget?” Also, “On a percentage basis, where do you like to see that number trend?” With that question comes a number of schools of thought but no real definitive answer. And, that being said, I am not sure there is a right way or a wrong way to look at it. In the end, it all shakes out in the Rental Income line. That said, there is value in tracking the discount from new vs. renewals and even budgeted rental increases that drive the loss to lease margins.
Our current practice is to book both discounts from new sales and renewals to a single loss to lease line. And, we try keep the loss to lease number at two to three percent of the the gross potential or top line – if you will.
Here are a couple of schools of thought to throw out there:
What gets booked in loss to lease?
1. The only thing that gets booked in the loss to lease line is discounts from market on new leases only. Renewals that maintain any discount from the top line should be booked as a concession.
2. Any discount from market gets booked as an upfront or recurring concession – be it a new lease or a renewal that transacts at a rate lower than the top line.
Where should loss to lease trend as it relates to the top line?
1. The number should be maintain between two to three percent of your top line
2. The number will trend at nearly ten percent of your top line
Is there real value in tracking loss to lease as a line item?
If it all shakes out in the rental income number – is there any real value [up market or down market] to tracking this number?
I’m curious to hear your thoughts. I am really curious to hear from those of you that are utilizing LRO as I think you have done away with the concept of loss to lease – correct?
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#apartmentmarketing: Culture
Your culture is your brand. TONY HSIEH – CEO, ZAPPOS.COM
Over the years much has been written about Zappos and Apple as it relates to culture. And, for good reason. Both companies enjoy massive success with customers around the world and continue to do so despite the ups and downs in the economy.
I have to believe it is due, in large part, to happy employees and more specifically the collaborative nature of their culture. I believe, in my heart of hearts, that a happy employee is a productive employee. And, a happy employee is, in part, is a byproduct of a superior culture. And, one that is customer-centric and based on a premise of trust.
Building Multifamily Culture
When I think of building culture; I think of the often quoted line out of: The Road Less Traveled by M. Scott Peck. The first sentence of Page 1 Chapter 1 reads “Life is difficult.”
Culture is difficult. When you think about it, you are attempting to meld a medley of individual cultures under the spirit of one unifying culture. The nuances are mind boggling.
Might I suggest that it bolis down to one word – Trust. Work on trust and the rest will fall in to place. Understand that it will take time, understand that there will be mistakes. Exercise patience with the former and reward the latter.
The health of your business depends on it.
What do you do to build up, maintain and push the edges of your culture?
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#apartmentmarketing: Persistence
“There are no magic wands, no hidden tricks, and no secret handshakes that can bring you immediate success, but with time, energy, and determination you can get there.” – Darren Rowse, Founder Problogger
A ton of rhetoric has been penned about social media as it relates to apartment marketing, resident retention and the such. Some of it is really good and some of it is just fluff and fill. Some has merit and some has not the sense god gave a billy goat.
Apartment management brass tacks
Toss it all aside and get back to the brass tacks of good old fashion property management – what do you have? Boring, mundane, uncompelling and anti-dramatic and melodic methods of madness. Anyone who has been in the business for a very long bit of time would agree that property management is not rocket science. Just a couple days ago I was sitting diagonal from a finance quant who thought he hit the nail on the head when he made that very statement.
Personality
At the end of the day – it’s the culmination of personalities laced with wit, wisdom, humor, elevated emotion and a purpose larger than life itself that bring about the want to persist with the quest of managing property. And, those who do it well would admit that it’s what gives them life.
It’s the time that they love to spend.
It’s the energy that they love to exude.
It’s the determination of pursuing a worthy goal that keeps them coming back for more.
Admit it – There’s something about this business!
What is it for you? What keeps you coming back for more? I dare you to tell me in the comment section below! Double dog…
M
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Apartment Pics: Photosynth
Caught this story over at a Century 21 site. Photosynth is an iPhone app that allows you to take 360 photos and upload them right to the likes of Facebook and the such. It’s after dark now but I can’t wait to try this out tomorrow.
Get Them Involved
I can see this being a very cool app not only for our site teams but for residents and prospects alike. That is if they have an iPhone or iPad. With that note in mind, think of the possibilites;
Tour
1. 360 views of your apartment communities curb appeal
2. 360 views of your apartment business/leasing/clubhouse
3.360 views of your grounds and common areas
4. 360 views of any or all rooms in any given apartment
Maintenance
1. 360 view of move out walk for the purpose of returning paid deposits or charging for damages
Due Diligence
1. 360 view of personal property inventory
2. 360 view of apartment condition at time of purchase
What else?
1. Would be cool to have something like this integrate in to Yardi, Real Page, MRI or the such…
2. Pics for website property landing pages
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#apartmentmarketing: Social Media Proof
The next time you hear a social media myth, question it. Ask for the proof, and ask out loud. – Dan Zarrella
So much flying around out there in the way of experts, guru’s, master’s of the universe and the such.
My new default gauge for validation; can I talk to a client that used your service prior to social media taking front and center? And, if that answer suffices; then you can show me your social media results and pass along another client testimonial or two.
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