Marketing Higher Rates... Someone Please Help!!

I am posting this sort of under the radar, so please don't ask who I work for, other than that any questions are welcome. so here is the story...

I am the Marketing Director (department for that matter) for an owner. Our company is small we own 5 communities in Dallas (all very near to each other), and so though we do have a Management company we actually set the rental rates and specials. For some unknown reason, I suppose because I spend the most time with at the actual properties I got to set the rates. Our Occupancy at all of the properties is pitiful but as we are new owners to most of these and are under an intensive rehab it's not bad for where we are.

They range from 80% - 50% occupied and from 177 - 392 units. after the latest trending in leasing which is moving up (very slowly I might add, usually around 1-2% per month)my boss, the owner, decided it was time to reevaluate the rents. After my careful consideration I made a proposal based on market plus about 1-2 months free and while some of the floor plans were higher most were priced just above the current rent...

Well the Owner made some changes and on these C & B level properties wants to change the rents from anywhere around $125-$50 more a month (current rates not effective. I fought him at first because it's going to be the slow leasing season soon and I can't imagine we'll hit our target by the end of the year, but he says he feels comfortable with them. I know the managers will hate it...

Am I wrong or right? Should we be going up on the rental rates so severly just before statistically we hit our worst traffic quarter of the year?

Thanks!

I would fill up drop rents to maintain being competitive then increase after breakeven point is met whatever that may be for each property.

Aggressive owner = not so uncommon, we've all been there.

I would get the rents in place - get the prices "out there" - obviously I mean in all ad sources + internal collateral (price sheets, etc.) - just to get the ball rolling.

I'm hoping that you have very good tracking mechanisms in place for all of your phone, e-mail, and walk-in leads so that you can see the impact.

I know you're looking for a yes or no on the rents question, but it's not that easy. Dress up all ads with great reno pics + make sure your marketing messages are appropriate to what consumers want to hear these days. Unfortunately, seasonality is hitting - you're right. So set your time frame (e.g., do you want to see an additional 10 points of occupancy over the next 90 days?) - then do your calculations of necessary traffic to get there.

Improper prices (we know this) will kill traffic - so get them out there, you know what you need to attract to get those leases. Then, meet closely with your peeps to make sure that everyone is on board with your goal, they believe in the prices (fake it till you make it!), and they are leasing at the top of their game.

After you have 30 days' data, revisit. It sounds like you have some flexibility to set prices - go with what owner wants, get the data you need, and revisit after 30 days.

A, B & C - doesn't always matter - people matter. Clean sells, engaging sells, service sells. Good luck!! And you're not alone in that concern!!

Great comment Steve. I agree. You'll never know until you try it. I think the real problem is that you've allowed the leasing teams to get comfortable with the prices. I would suggest ongoing that making minor adjustments more frequently would help you out in the long run. Whether that's taking a weekly look at adjusting pricing or even every other week, the leasing teams will become more comfortable with "change". People in general don't like change. To help, I've seen that giving them small doses more frequently can help over come the issue. Best of luck!

As someone who has worked at the most expensive property in a market, I feel your pain. I agree with Mark. I have to tell you it is all in what your staff believes. Perceived value is crazy in the way it motivates people. If your leasing agent loves the property and thinks it is worth the rent, then she/he will convince the customers. I've seen two leasing agents work on the same property and the one girl who believes in the value and she will close twice as many as the other that questions the price, even though they were both good at their jobs prior to the increase. So as Marketing Director, do a little in house marketing and get the staff on board with the new price. Convince them!

When you're talking to your owner, you have to tell them every "too expensive" hang up you get, every walk in pick up the prices and leave in order to let them know that they are pricing you out of the market. I had a piece of paper by the phone and every time I couldn't get people past the price I made a tick mark so each day I could say I lost 3 people, and I sent the owner an email every week detailing that. And of course he saw our traffic, but those "I just want to know, how much is it" people that don't want to give you info can really add up. And really, do you want to put "John Tooexpensive" or "Sarah Hunguponme" in as traffic?

My owner never listened to my complaints about prices. Once he raised them he wouldn't back down. We did offer specials through the winter, and that helped, but eventually I got used to the aggressive pricing and even suggested he raise the price once. After we resuscitated him, he agreed.

I agree with everything everyone else has said. The key is to make sure that you have the right staff in place and they are excited about the new changes. You are right now making a statement that says hey look at us see what we are doing. Set the standard in the area for your market others will follow eventually, we tend to do what our peers are doing if it’s working for them. Get a great marketing campaign out in the market and make sure you are everywhere, so no one can forget who you are especially. For instance I have just moved to a new company as an Assistant Manager on an Affordable Senior Property that occupancy is not so hot. They were not doing a whole lot of marketing outside of Senior Living and For Rent. The prices are too high for the area but the apartment homes and community is worth the price. So the property manager and I came up with a strong marketing camping to sale the property. Its working and we are even getting the residents involved with helping us. The key is going to maintain the standard of you want to live here, there is no other place like us, look what you get with our price of rent versus the other places ( make a comp book and update it weekly make sure they include pictures). You are not going to be able to close on everyone but you will get leases. Also make your residents want to stay and see if you can only raise the rent by 2% so they wont leave and your owners feel like they are getting a little more income and have more than the required Resident Activities....have a resident activities committee where maybe they get a little something off their rent. If current residents are happy where they live WOM will get out! Just remember it this way how much are you worth, would you sale you’re self less than you’re worth... The key is to make money not give it away. A motivated staff and residents will make a big difference!

Jolene Sopalski
Assistant Manager
Finlay Management,LLC

Make sure you tie your marketing efforts into your local Apartment Locators. Having a many motivated locators can become invaluable when you need to increase your occupancies in a hurry.