Prime 70's Mansard
A client recently asked, “Do you know of any information on how to rent older properties?” Her property was built slightly before most of us were born.
Early in my career I was spoiled rotten. I did lease-ups of new construction luxury sites. When I had to do an analysis on an aging Class C property I turned my nose up and sniffed, “They should just invest in a flame-thrower.” My cronies and I were amused; however, several years later I had several of these little flame-thrower targets in my portfolio. Imagine my shock (and embarrassment) when I realized that these were the assets that threw off the majority of cash in our organization.
So what do you do when you find yourself adrift on an aging property (not old enough to be charming or cool but too old to be hot and trendy)? Do you wallow in self-pity and stare in envy at your new, amenity-rich neighbors? No way! Beat up the new kids on the block with a stripped down, value approach!
- Rent the basics—not the bells and whistles. Why pay for what you don’t need? Remind your customer that they are not paying for amenities that they will never use. (How many people actually use the pool or cardio room? They may say they will but end up not having the time.) Remind them that “The money you save on rent can be applied to the things you really want!”
- Buy the upgrades you will actually use: Want a kick-butt health club with spin and Pilates classes and machines that actually work? The health club industry is suffering just like the rest of us and they are offering deals! You can get a membership very inexpensively. Better yet, negotiate a property or portfolio discount and create resident clubs (boot camp, spin, Pilates group, yoga group) to go to the health club together.
- Mature landscaping is GREEN! Highlight the fact that you have mature landscaping that adds beauty to your residents’ world. Older properties often have extensive grounds; do you have an area that could be dedicated to a community garden? Garden plots and compost piles are easy and inexpensive to create.
- Focus on design plusses:
- In the Pre-ADA years room sizes tended to be larger. While unit square footages may have stayed pretty consistent, where space is allocated has not. New construction design mandates larger bathrooms and kitchens to allow for wheelchair access. This has resulted in smaller bedrooms. Families and roommates will appreciate more space in these rooms.
- Older properties tend to have larger balconies. In some communities this is not an issue but many people enjoy the opportunity to step outside—whether for a cigarette or fresh air break. Due to the costs of balconies, often these are value-engineered out or downsized today.
- Galley kitchen? We have heard a lot lately about ‘foodies’; however, consider your demographic: do they eat in or out? Many of our residents never use anything but the refrigerator and microwave. So if they comment on the small size of the kitchen, determine if they are asking out of habit or if they do like to cook. If they are foodies, all is not yet lost—advise them on how they can extend their kitchen into an adjacent dining area through the use of butcher blocks, microwave carts, IKEA islands, etc.
- Focus on what you can do to be better than your competitors:
- Focus on EXCELLENT customer service. Can you get your work requests done faster? Can you offer custom painting at renewal time?
- Add conveniences for your customers: free use of the fax machine, selling stamps, free movie rentals or free photocopies.
- Create regular resident events like book clubs, biking, a sand volley ball team, etc. to encourage community.
- Solid construction is an older feature you should brag about! It is unlikely that any of your parts were pre-fabricated off-site. Everything was carefully handcrafted with pride right there! This means that your building is probably solid and relatively quiet.
- Older properties tend to be in great locations closer to business and entertainment centers. Promote neighborhood ‘walk-ability’, convenience to business centers, nearby green spaces, entertainment venues, transportation and key arteries.
- Got charm? Sell it! Anything that is different sets you apart from your competitors. Your job is to draw attention to it and tell your customer why it matters to them.
Maximize what you have! Be proud of the value you represent! And don’t forget to ask for the sale!
Cheers! Jim Baumgartner | RentSoda
