If you have vacant apartments, and thinking about modeling an apartment, you’re probably thinking, can you afford it?
You can’t afford NOT to have a model!
CONSIDER THIS:
- All new apartment developments I work with have apartment models. If the apartment has lots of different floor plans, especially if there are any odd angles, or funky spaces, or weird lighting, usually, the question isn’t “Should we have a model?” it turns to “How many models can we have?” Typically, when we do a model, the modeled floor plan leases up MUCH more quickly than other floor plans, leasing activity spikes, and the closing ratio’s rise.
- In the real estate world, (for-sale of single family homes), it is widely accepted that A.) Potential buyers make their decision to purchase a home in the first 30 seconds upon entering. First impression is the key! and B.) well staged homes sell for 30-50% faster than their counterparts. (Not only do they sell fast, they usually sell for MORE.) (real estate facts found here.)
Which feels more welcome to you? The vacant room or the staged/modeled family room?
What happened to that school of thought – give them a blank slate, and let them imagine it themselves! The reality is, people have stressful lives, they want immediate gratification, they want EASY. Why is television so much more popular than books these days? Television is easy gratification, no imagination needed. People don’t have to think after a long stressful day. Let’s give them EASY folks! Make it easy for your prospects to imagine living in your apartment community – in one of your apartments. After a long stressful day at the office, or a long day of apartment hunting, having imagination is the last thing on your prospect’s mind. Make it EASY for them! Make the model apartment feel welcoming!
The question always comes back to COST. If you have more than 10 vacant units at a time – you can’t afford NOT to have a model. Consider this example of vacancy loss:
OK, let’s make it easy and do the math. Let’s say we’re talking about ABC Apartments. They have 100 units. Their average rents are $1000.00/unit.
Prior to the rental market taking a downward turn, ABC Apartments has been running along great, apartments never took very long to lease, and they had been at 97% occupancy for many years. (only 3 vacant apartments)
Fast forward to today, they are at 88% physical occupancy, which means they are at 12% vacancy or 12 vacant apartments. All of the sudden, they are struggling with just staying ahead of the renewals and turnover. Increasing the occupancy in the midst of the resident turnover looks very daunting.
Let’s do the math.
At 97% occupancy, the vacancy loss is:
(Average Apartment Rents) x (# of Vacant Apartment Units)
$1000.00 x 3 vacant apartment units = $3000.00 of vacancy loss monthly. This is what they are used to operating at. Annually (x12), this amounts to $36,000.00 of annual vacancy loss.
TODAY, the apartment project is at 88% occupancy, the vacancy loss is:
$1000.00 x 12 vacant apartment units = $12,000.00 of vacancy loss monthly. Annually (x12), this amounts to $144,000.00.
The different in vacancy loss monthly is $9000.00! ($12,000 – $3000) And annually, the difference is $108,000.00! ($144,000 – $36,000)
If we apply the real estate facts – that well staged homes sell 30-50% faster than their vacant counterparts, how much does the $108,000.00 mean to this apartment project? The Owner/Developers/Investors? The apartment community manager?
If we can spend a couple thousand dollars (or a few thousand – depending on your budget, your property, and your clientele) and reduce the vacancy by 30-50% over the next couple of months, wouldn’t that model be TOTALLY worth it?
My next blog will focus on budget conscious tips for putting together a model! It doesn’t need to cost a FORTUNE to make an IMPRESSION! Please check back to read all about it!
Don’t GET IT? Make it EASY! RENT SODA! GET IT!
-Daisy Nguyen in Minneapolis, Minnesota MN
CEO/President
Offering Apartment Marketing, Apartment Business & Operations Consulting & Apartment Industry Training
Web: RentSoda.com Email: Daisy {at} RentSoda(.)com
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