Ms. Management June 2017

Posted: 1st June 2017 by Melissa in Ms. Management
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Carol Levey, writer and creator of Ms. Management also appears as a guest blogger on Rent Sense. Her insights appear in dozens of other industry publications across the country. Carol is a regular presenter at the annual AAMD Education Conference, has served as MC Host for Award Events, and consistently over 35 years of volunteerism taught & authored curriculum for AAMD Education. She has been acknowledged for her outstanding contribution as an Industry Supplier becoming the recipient of the Jack Shapiro Award Winner twice; in 1987 & 1990.

Carol Levey is perhaps more recognized at the national level as an educator in the real estate industry. She served as one of the original team that produced the National Apartment Association coursework leading to the respected NALP designation. Her company Levey Enterprises has provided temporary leasing specialists, site managers and marketing offsite personnel to major apartment community operators throughout Colorado and across the U.S. Her business was founded on decades of experience in property management and executive leadership as a third-party leasing and corporate housing provider.

Read on for this month’s Ms. Management Q and A!

Q: I’m an onsite property manager in my third year at this apartment community. We have enjoyed resident satisfaction and renewals despite steady rent increases. However, with new construction now leasing up in our marketplace we are getting “push back” on our renewals; complaints about rent increases and demands for improvements and/or concessions. We send our renewal notices but residents put us on “ignore” while they check out their options. Meanwhile, requests for repairs seem to be ramping up.

This changing situation is putting my team back on their heels. The maintenance guys are being stretched between “vacant turns”, maintenance and other service requests. Our leasing specialists are under pressure to hit their leasing numbers and therefore, are offering greater latitude to potential residents: alternative floorplans, locations, condition and move-in dates. Our existing residents are getting wind of what is being done to accommodate new leases and demand similar treatment. Of course, all this custom treatment is impacting the service team as well. We need every renewal and right now we are working harder to get it done. Any advice to help us work smarter?

A: Renewals are essential to the successful operation of any apartment property. Renewals must be understood and managed as a priority by the entire team. Here’s where your leadership is essential. Often, I discover from interaction with onsite teams across the country that renewals are treated as if they are outside our control. Existing renters will make their move as their circumstances dictate, it is reasoned. When new apartments arrive on the leasing horizon (for example in metro Denver there are currently 26k apartment homes under construction) all the attention goes to new leases without considering how important retention is to your team during this time. While you cannot control the marketplace or your customers you can make an incremental difference to retention.
How much of a difference? I usually advise onsite teams to focus on moving the retention rate up by 3-5%. Example: an apartment community of 400 homes currently turns over half of their rentals so they have a retention of 50% over the year. Let’s make a priority that this year we will retain 53-55%. This translates to renewing an additional 12-20 leases.

Why? This incremental improvement will have a leveraged benefit to net operating income (NOI) because you have reduced your availability. Your leasing traffic is directed to fewer vacant apartment homes. Leasing is energized. Maintenance can render better and more cost-efficient service when retention is being optimized. The whole team is working smarter. Further, ownership is encouraged by increased NOI that the right team is in place, property value is on the rise and further improvements should be considered.

Your team can understand “why” renewals are important because you can show them specifically. When this is the case they become more open to you and “how” we are going to get it done and “where” systems and routines can be developed to keep renewals a priority, everyone wins.
To Be Continued……………

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