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Laura Renaldo The balance sheet looks better with higher rates even with it vacant. Banks can't tell the difference.

Anonymous member Interesting.......do you mind explaining a little bit more? I hear what you're saying, but I still don't really understand. lol
Also - this is a lease up and on the market. I know they want to keep rates high for that purpose, as well. Just trying to not seem like a dummy. My brain just wants to fill ALL THE UNITS.

Leah Love Anonymous member the potential (GPR) for higher rent is what matters to lenders. And 95% May be their proforma.

Miles Scruggs Anonymous member for financing they are going to factor a vacancy rate of 5% anyway. Let’s play with some numbers. Say you have 200 units rented at $1000 at 95% occupancy. So now they are going to finance off a gross income of $2.28M. If you fill the last 5% at $800 then that will be a total gross income of $2.376M but they factor out 5% which gets you back to $2.2572M. Now if the bank is financing at a 7% cap rate that would mean that slight drop in revenue would changes the financing by roughly $326,000. Same thing is if they are grooming for a sale.
Now if ownership wants to keep those vacant and they aren’t chasing financing or a sale then they need to go sit in a corner and contemplate their life choices as they are foregoing your salary in lost rents.

Guest Insider But….vacancy loss can be a lot higher than lowering the rent by a little. You can always suggest keeping the market rent the same, and show a reoccurring concession every month for the $100-$200. But some owners hate concessions🤦🏻‍♀️

Allie Gartside I genuinely believe it is a mentality mindset over “financials”.
Having dealt with an A class property and multiple owners with insane net worths - even having them come in and being directly honest with them about a stale unit. I truly believe their mentality is “If they don’t want to pay the rate, someone else will.” And that someone will eventually come a long.
We had a street level studio loft unit. It was a really cool unit BUT, the patio was all concrete. No Sun ever. Zero natural lighting because the second building was smack dab, right against the other building. There was not a single closet in it, not a coat closet. Not a clothing closet, zero storage. THEN that unit opened their door and boom ALL the buildings mailboxes. Amazon prime days, who ever occupied that unit HAS to step over packages. Then to the left of their front door was the building door. So anytime, someone entered or exited the building, from the draft, that units door would rattle.
It was constantly people...I genuinely believe it is a mentality mindset over “financials”.
Having dealt with an A class property and multiple owners with insane net worths - even having them come in and being directly honest with them about a stale unit. I truly believe their mentality is “If they don’t want to pay the rate, someone else will.” And that someone will eventually come a long.
We had a street level studio loft unit. It was a really cool unit BUT, the patio was all concrete. No Sun ever. Zero natural lighting because the second building was smack dab, right against the other building. There was not a single closet in it, not a coat closet. Not a clothing closet, zero storage. THEN that unit opened their door and boom ALL the buildings mailboxes. Amazon prime days, who ever occupied that unit HAS to step over packages. Then to the left of their front door was the building door. So anytime, someone entered or exited the building, from the draft, that units door would rattle.
It was constantly people breaking the lease or left unoccupied. I even addressed complaints with the owners to add more lighting, add a closet. Fix the door OR changing that unit into a gym, clubhouse, locker room - would have been a better use for the space.
Nope. Didn’t change a thing.
Owners don’t like to hear it but they honestly need to. Which I feel if they are so worried about a specific few units and charged $100 less a month, just increase a few more desirable units instead.
Cause your undesirable stale units right now, are going to continue to be that way for the entirety of that building’s existence. Doesn’t matter how up front you are with a prospect sometimes either.
Another suggestion you could present to owners is maybe have them consider corporate leases for that stale units. A company may be willing to spend more and their employee really won’t have a choice on the unit.
Another thing I’ve seen a luxury property due is turn a stale unit into their own airbnb but for residents guests. If you’re a resident and have family coming to stay with “you”, they treat it like a hotel. Which is really cool, I know for me as a renter, I’d use that because I have family that comes to visit from England. They like being close and also having their own space.
So just some ideas but yeah if you’re an owner reading this - listen to your leasing team and ask for their 100% honest feedback. Cause they literally know your property best. Show more

I genuinely believe it is a mentality mindset over “financials”.
Having dealt with an A class property and multiple owners with insane net worths - even having them come in and being directly honest with them about a stale unit. I truly believe their mentality is “If they don’t want to pay the rate, someone else will.” And that someone will eventually come a long.
We had a street level studio loft unit. It was a really cool unit BUT, the patio was all concrete. No Sun ever. Zero natural lighting because the second building was smack dab, right against the other building. There was not a single closet in it, not a coat closet. Not a clothing closet, zero storage. THEN that unit opened their door and boom ALL the buildings mailboxes. Amazon prime days, who ever occupied that unit HAS to step over packages. Then to the left of their front door was the building door. So anytime, someone entered or exited the building, from the draft, that units door would rattle.
It was constantly people breaking the lease or left unoccupied. I even addressed complaints with the owners to add more lighting, add a closet. Fix the door OR changing that unit into a gym, clubhouse, locker room - would have been a better use for the space.
Nope. Didn’t change a thing.
Owners don’t like to hear it but they honestly need to. Which I feel if they are so worried about a specific few units and charged $100 less a month, just increase a few more desirable units instead.
Cause your undesirable stale units right now, are going to continue to be that way for the entirety of that building’s existence. Doesn’t matter how up front you are with a prospect sometimes either.
Another suggestion you could present to owners is maybe have them consider corporate leases for that stale units. A company may be willing to spend more and their employee really won’t have a choice on the unit.
Another thing I’ve seen a luxury property due is turn a stale unit into their own airbnb but for residents guests. If you’re a resident and have family coming to stay with “you”, they treat it like a hotel. Which is really cool, I know for me as a renter, I’d use that because I have family that comes to visit from England. They like being close and also having their own space.
So just some ideas but yeah if you’re an owner reading this - listen to your leasing team and ask for their 100% honest feedback. Cause they literally know your property best.

Leah Love It decreases the value of the property when they lower it, which is harder to recover from.

Guest Insider Try setting it up as a mini model for the new resident to keep when they move in. Set up the bathroom with a shower curtain, rugs, etc and maybe something for the kitchen as well. You can get a box of pancakes, mixing bowl with mixing spoons, nice hand towels, etc. Something you can show and they fall in love with the cute little items for them to keep. Hope this works as it has for me. 😊

Guest Insider Unless the view is looking over the compactor / trash, I think $100-200 is too much of a discount to ask for. Maybe just request a negative amenity charge of $50 for bad views / positive $50 amenity charge for the really good ones. It should balance out on financials. Technically at 95% you are probably no longer considered in lease up, unless a 2nd phase is slated to start soon. So it’s all about numbers now vs occupancy, bc most developers do not do long holds on new assets.

Guest Insider See if they will let you give a discount off the first month only which will effectively lower the tenants rent but won’t hurt the rent roll.

Guest Insider Greed and stupidity

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