Multifamily Marketing
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?
Technorati Tags: @mbrewer, mbrewer, mike brewer, apartment operations, loss to lease, gain loss,
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#Apartmentmarketing: Attention Economy
Instead of one-way interruption, Web marketing is about delivering useful content at just the precise moment that a buyer needs it. – David
Meerman Scott
Seth Godin quipped that engagement is hitting people with the right message at the right time so as to have them take action [engage]. I think we have to take that word engage and thus precise moment further. To truly engage, at least in my head, you have to be enchanted, you have to be moved, you have to yearn for more so much so that you have no choice but to act on your desires. It the deepest throes of emotion. Words like love, anger and the many nuances of each come to mind. It’s not just a like, unlike, +1 or the such. It’s deeper.
Mr. Apartment Manager Man; “I am done.”
It’s not unlike the gentleman I met with last Friday evening. He, unfortunately, was moving out of our Central West End Community. Reason? In his words, “I am done.”
You see about three weeks ago, the entire roof of his five story building blew off and landed in the parking lot beside and the street in front. Thank the one that governs it all that no one was hurt as it could have been really bad.
In response to the situation; our team entered every apartment in the building and place plastic over beds, electronics and the such. Most were thankful. Not the gentleman I met on Friday. His beef? We did not leave him a note to let him know we had been in his apartment.
Engage
Somewhere in the wake of the roof being pulled off the building by straight lined winds; his attention got engaged. The premise aside; he was moved by an aggressive deep seated emotion. He engaged with some ill language and barbed personal remarks for the onsite team and the rest of our Mills management team. He got so engaged that he ended up leaving the property.
The Point
I think we are headed toward true engagement – we are not there yet. We use the word but in it’s loosest of senses. We are in the early innings of a very long ball game that is frankly destined for infinite extra innings. Think in terms of singularity. Think in terms of love, hate and other extremes. That’s engagement. For now we are just courting. Or, at best out on a blind date and liking our mate because our friends suggested we should. Now it’s up to us and the million other people out there participating with brands to fall in love or fall in hate.
What do you think?
Photo tip to: Online Ninja Blog
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Multifamily: 101 Days of Marketing
As the #trust30 challenge winds down; we are gearing the next series of compelling content. The series will be dubbed 101 days of apartment marketing and will start July 3 when we wrap up #trust30. We were so inspired by the absolute discipline of the last series that we thought; why not try and continue the daily routine of writing.
#trust30’s concept of penning daily prompts lead us to search for something that would provide the same sort of direction. We looked at several lists and settled on @hubspot ‘s 101 Awesome Marketing Quotes .
Keeping in mind that multifamily professionals are busy; we intend to keep or offerings short in nature, hopefully 200 words or less. And, quick and to the point. Some will be conceptual while others will be real life examples from our journeys at Mills Properties [the sentiments aimed at those out there that believe content not backed by practical application or identifiable results is waste – we agree to disagree].
Nevertheless; we hope to make it fun. We hope to learn some things about ourselves and the community we have managed to attract over the years. And, we hope to conjure up some cool multifamily conversation.
Please feel free to comment where you see fit – good, bad or ugly. It all matters to us.
M
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Multifamily Marketing: Byproduct
The purchase should be the byproduct.
If we shoot for the moon as to land somewhere in the stars – fostering crazy amazing social connections should/would be the goal.
Your strategy would wrap nicely around that goal and if you are truly dialed in that would ladder right up and align nicely to your company values.
In marketing to those fine people that live in our multifamily communities – fostering the premises for social connections is key.
Your off to create meaning connections contributor,
M
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Apartment Marketing: Becoming Human in a Digital Space
Ran across a great post over at Brains on Fire recently that spoke to the necessity of companies being human. It’s well beyond the time of shedding fear. In their terms; “welcome to a brave new world.” Be it on your facebook pages, your blog, your web copy on the phone or in person; it’s paramount that you go for friend first and business transaction second. The hard part is letting your company hair down; in that context consider this.
It’s Time to Shine
Imagine for a moment; you meet a cool guy or gal at xyz function and decide that the two of you should get together again sometime. You agree to call in a couple days to see about a time and place to meet. When you call you let him/her know that you have appts stacked on top of appts but you can squeeze them in around six two months from Tuesday. Oh and, by the way, don’t forget to bring your credit card.
It’s a bit tongue in cheek but in the same respect it is how we treat the human beings that are reaching out to befriend us in our businesses. “Thank you for calling Hidden Treetop Village on Golden Pond Apartments; this is Suzy Trying to Hard to be Cheery Cardwell; how can I be of service to you today?” People see right through the lipstick.
Do we talk to friends like that?
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