May 18, 2023 |
Updated May 30, 2023
Examining four approaches to leasing success as the industry navigates an ever-changing rental housing marketplace.
The process of leasing apartments has undergone myriad changes since the pandemic began. The tactics and strategies that are working now in prospect marketing, processes and procedures are correlated with a recent explosion of technological innovations. At the same time, though, the savviest operators aren’t tossing out the old with the new but are continuing to call on personalized service more than ever.
COVID-19 triggered companies to adopt emerging tools that offer virtual alternatives so staff and residents could avoid potential health risks from in-person tours and lease signings and social interactions when the virus was at its peak.
Although technology was in use before the pandemic, its spread and seriousness spurred more multifamily players to make proptech a priority, says Jillian Fikkert, Director of Property Marketing at King of Prussia, Pa.-based Morgan Properties, which owns and manages over 345 properties in 19 states.
And even though COVID-19 has waned, the tools remain popular. One major reason is that leasing staff became harder to recruit and retain and a growing line item on most budgets, says Levi Kelman, Founder and CEO of Clifton, N.J.-based Blue Onyx Properties, which owns and manages properties in New York and New Jersey. Other reasons, he says, are that they help make remote work more seamless and successful, offer a strong return on investment, and the younger generation favors the technology. “Eighty-six percent of renters utilize internet listing services to search for apartments. Over 70 percent of those renters use three to four sites,” Kelman says.
Moreover, momentum grows as more tech innovations become available. John Helm, a Partner at Park City, Utah-based RET Ventures, a venture capital fund that invests in technology companies to manage, operate and help run multifamily properties, attributes the uptick to managers working to make leasing more efficient.
The following four approaches are worth considering as the industry tries to stay ahead of what 2023 and beyond will bring in occupancy rates, rent prices and concessions in different markets. “For now, we’re seeing a high renewal rate with few concessions since most communities are at nearly full lease-up and renewal rates are high,” says Diana Pittro, Executive Vice President of RMK Management Corp., which has 35 properties in four Midwestern states and now also manages 55-and-over and build-to-rent single-family home products.
In Kelman’s East Coast markets, however, he’s seeing rent increases decline, and certainly double-digit increases have disappeared. He also anticipates owners may offer concessions in certain markets that have a short-term oversupply due to the timing of new construction deliveries.
Use a curated marketing and advertising approach.
Carefully picking how to budget advertising and marketing dollars to make the biggest impact is a goal, says Sarah Randolph, Director of Marketing Technology for Charlotte, N.C.-based RKW Residential, which has 35,000 units under management and consulting in eight states. “We consider a property’s occupancy rate, what’s going on in the economy that affects it and a time frame. Keeping a close pulse on property performance as well as macro and micro trends allows us to be strategically nimble as circumstances change,” she says.
Fred W. Pierce, President and CEO of Pierce Education Properties, which has 28,000 beds in 18 states, agrees and sees that as an industry-wide trend. “We’re all data mining and figuring out how to use social media and reach our target audience,” he says.
Companies get there in different ways. RKW Residential established key performance indicators for property performance that allow for a proactive approach to adjusting strategy and advertising spending in both the short and longer term, Randolph says. RKW knows the short-term is important because the average renter looks only a maximum of 27 to 32 days out. “We advertise differently for properties with immediate availability versus stabilized properties with little vacancy,” she says.
RMK Management has found that digital marketing offers the best value for its dollars, including pay-per-click (PPC), look-a-like campaigns and paid social media ads. “Internet listing service (ILS) sites and websites are still used but the quickest and easiest way to reach prospects is through digital PPC,” Pittro says. The company has also seen greater use of TikTok as a primary platform for paid digital ads, with 64% of users aged 30 to 50 years old, not just Millennials and Gen Z.
Morgan Properties values its digital footprint and has found that prospects can shop around easily, so it’s important to provide accurate and consistent information across all sites. “We strive to make information accessible and put it right in front of them, so they can access it with one Google search,” Fikkert says. “We’ve learned that most want to shop for a home the same way they shop in other marketplaces—see photos, get prices, understand restrictions,” she says. Her company has found it wise not to change a strategy before it learns if results work, which it determines from leads generated, tours and signed leases. “Generally, we need 30 to 60 days to determine a campaign’s success,” she says.
Chicago-based property and financial services firm Draper and Kramer is embracing Google Analytics 4 (GA4), its latest iteration, says James Love, Vice President of Marketing and Brand. His company manages 6,000 units in three states. While the prior Google version allowed it to track traffic to its website and find out how long visitors stayed, it now can learn more about behavior, he says. “For prospects that show up frequently, Google Analytics 4 knows they’re serious and sends notices for the next 30 to 60 days during their search,” he says. “While we don’t receive specific personal data or details, we can get overall behavior trend analytics.”
KrisAnn Kizer, Vice President of Leasing and Marketing at Pierce’s company, is adjusting her approach because of Google’s new privacy policies that eliminate cookies gathering data. “We now have to collect information from residents directly. Gen Z is more skeptical about information coming from a company and prefers to see it posted by a resident using YouTube, TikTok, Instagram or videos,” she says.
These remain important to improve the leasing experience. RMK Management updates its property websites by making them easier to navigate, featuring more professional photography and videos. The company is also using a new marketing tool, what it calls “a nudge” that’s added to a landing page to provide more persuasive information and language to help the decision process. It’s also using new social media search words to replace those overused, such as “furry friends” rather than “pet-friendly.” Because it’s repurposing amenities, it’s making that clear, too, such as a game room instead of a media room. The websites are also
putting UTM codes to track users and visits back to the websites. For ease of access, there are links to the company’s community and corporate websites. In a purpose-built student housing property, having the right content is also critical. There, residents may want to know immediately if pets are welcomed since many now bring them to campus, Love says. Pierce emphasizes that content must be mobile-optimized—particularly on mobile devices—since that’s how most students access information. Adds colleague Kizer, “They don’t want to wait for a call back.”
Improve internal communications.
Having everyone on the same metaphorical page wherever located and whatever department they’re part of requires planning, but has become easier than when everybody worked in an office since some might use email, others a telephone and some in-person conversations, says Love. With the shift to a digital platform, being connected has become quicker and easier. “We’re now able to be on the same software wherever we are,” he says. To improve communications, RMK Management added a floating property manager and leasing trainer staff positions to heighten support.
Prioritize and update technology.
Products keep being introduced, and Millennials as well as Baby Boomers embrace them. “More renters expect an experience similar to that of other industries—instant, automated and curated. So, keeping up with the latest technology is crucial,” says Randolph. One reason is that having the latest innovations offers consumers a feeling of control over how, when and where they can search, Kelman says. Managers are also comfortable with the growing array of products and results, he says. For cost savings, most companies prefer to customize what’s available through third-party providers rather than develop proprietary ones. The following are 10 popular tools:
- Centralized prospect data. Systems are available to help managers build a history around a prospect rather than the former way of building it around each property, Helm says. “This way, everyone in the company knows what the person is looking for and there’s one centralized file, which saves time,” he says. “It also leads to greater satisfaction among prospects.”
- Self-guided tours. Tour options were available prior to the pandemic. RMK enhanced options over the last few years to be more flexible and versatile with new video, self-guided, Zoom and FaceTime tours, says Pittro. At the same time, her company is finding them less popular in the apartment sector than in the growing build-to-rent single-family home category. To gain access, many prospects use a code or facial recognition. The result of various approaches lets a company pare staff, Helm says. And another big upshot is that these tours are leading to more signed leases. Love attributes that to a prospect narrowing a search in advance and looking at fewer properties.
- Virtual leasing. The ability to have prospects and virtual managers sign leases online has also led to a need for less staff. Some companies are considering giving up a leasing office, Helm says. Fikkert’s company has found that even after the pandemic, many will sign a lease without having seen the property based on the virtual tools available. But there’s still someone available in person if desired, she says.
- Tighter screening. Before technology intervened, more leasing scams occurred. Systems today can detect fraudulent credentials, so that fewer evictions are needed after residents move in, Helm says. With student properties, this involves better checks of a guarantor, Kizer says.
- Greater building health. Similar to a LEED score that measures sustainability, the Fitwel®certification determines the healthfulness of a property, and is increasingly championed by leading institutional real estate allocators for their portfolios. It can include an assessment of ventilation systems, lighting and other operational considerations, Helm says. “This started in offices and is moving to apartments as this focus has only become more important post-COVID,” Helm says.
- Internet connectivity strength. Connectivity has been a prime concern of renters for years, both for units and shared spaces. They also want it free. More properties are doing so. Some bundle services may mean lower costs to them from one designated provider as well as for residents if the buildings still charge. And some companies are unbundling services and discontinuing cable since many residents prefer to stream, Kizer says. Also, the time frame to update bandwidth has shortened, so reviews are done annually rather than after several years, she says.
- EV charging stations. As more residents switch to electric vehicles, more buildings include a few stations indoors or outdoors, depending on their property. At purpose-built student housing, a low percentage of students have electric cars, so Pierce has found less demand for this in existing buildings since retrofitting is expensive. But for new buildings, some may be required by a state or city, Kizer adds.
- Chatbots. The growing use of artificial intelligence is leading more owners to rely on virtual assistants through different providers, with those that appeal most handing off questions to a human if they don’t have answers. The more sophisticated systems have improved conversations, so they sound more human, says Kelman.
- Interactive technology. While interactive websites have existed, they’re becoming a more common leasing tool to help prospects visualize where they might be within a building, what view they may see and how far they are from amenities, says Randolph. The industry goal is to show where a unit is in relation to others available as well as a property’s amenities, Fikkert says.
- Reviews. Getting residents to comment favorably has helped Love’s company raise its stars. “It’s not usually the only thing that matters but if they debate listings, it can make a difference,” he says. What’s essential with words and photos is that they be authentic, Fikkert says. If a negative comment pops up, Pierce Education Properties’ managers address the problem immediately. It also uses its intranet for residents to voice problems there first, before sharing, offers points toward rewards to those who share opinions and uses a third-party survey to query students, Kizer says.
Technology challenges remain. Managers need to be sure that tools from different suppliers work together, says Randolph. They also need to periodically evaluate choices seen from a customer’s point of view. Residents may want somewhat of an instant gratification-type of experience, she says, but the goal should be to try to give them a sweet spot between automation and personalization. Kizer’s company has found that it’s better to focus on the proptech that benefits residents rather than bombard them with everything at once.
Don’t neglect conventional strategies.
Some properties reward residents with giveaways, gift cards and rental discounts for referrals, Pittro says. Curb appeal for great first impressions remains important through tidy landscaping, good signage and professional photos, Pittro says. In-person social events, which have returned post-COVID-19, also appeal. One of the best come-ons is through food, with food trucks popular whether it’s ice cream and tacos for people or treats for pets. “Such events can be a differentiator when other nearby rental communities don’t offer the same,” Pittro says. Pierce agrees and says all students love food, especially when it’s free. They also like living with friends, so rewarding them for referrals is smart. At a time when one prestigious university’s favorite course is “Psychology and the Good Life,” finding happiness has become relevant with housing, too. “The best online advertising, tools and videos aren’t worth as much if residents are unhappy,” Kizer says. “The goal is to set your property and experiences apart.”
Barbara Ballinger is a frequent contributor to units.