One of the difficulties in the multifamily industry is that we, like most industries, have a great deal of jargon that we use as short-hand but which can alienate people new to the industry.
One of the more common terms you'll run into, especially in companies that do lots of new construction, is a property lease-up.
A property lease-up refers to the time between the announced launch of a new apartment community and six to 12 months after opening. During that time the community will build a brand, establish a website, open its doors for business, and welcome its first batch of residents. At the end of a successful lease-up, occupancy should be in the mid to high 90s and residents should be paying rent rates at or above average market rate.
What unique marketing challenges do you have to address when doing a lease-up?
We have already written a more general guide to effective lease-up strategies. In this post we want to talk, instead, about three core difficulties facing new constructions.
First, lease-ups do not have any authority built with search engines or human apartment shoppers.
One of the most important points in both online marketing and the multifamily industry is trust.
In SEO, trust matters because search engines place higher value on sites that are perceived as authoritative and because human users need to know that the faceless entity behind the website they're using is trustworthy.
In multifamily, trust is a big deal because an apartment lease is an extremely risky purchase: The person signing the lease may spend as much as a third of their annual income on the product they're buying. So it's a significant financial cost. Additionally, a bad landlord experience can have a huge impact on your quality of life. If a landlord doesn't fix issues with the property, rents to bad residents, or doesn't maintain the property, your life is going to be affected.
In both cases, people want to know that they are working with a trustworthy party.
With established communities, you can potentially have a solid local brand with apartment residents. You also hopefully have a website that has a strong amount of authority built up with search algorithms.
Lease-ups, simply by virtue of being new, do not have any of these things working for them. When they launch their website, search engines know nothing about the people behind the site. Likewise, local apartment shoppers do not know anything about the people managing the community. So there is simply a larger risk here for both search engines and shoppers. Search engines will manage the risk by sending less traffic to the website. The shoppers will manage it, most likely, by being a little more cautious when shopping, asking lots of questions, and moving slowly through the shopping process.
In both cases, it is important to remember that your prospect is going into the deal not knowing a lot about you and unsure about whether or not they can trust you. Building trust, then, is absolutely vital: With search engines, avoid suspicious looking behaviors like keyword stuffing or buying backlinks. With human apartment shoppers, focus on being empathetic, considerate, and putting their needs first in both your marketing and leasing strategies.
Second, lease-ups cannot offer as much actual photo and video content as established communities.
This is related. Established communities have apartments that are actually move-in ready plus a finished property, clubhouse, amenities, etc. So when they are building out their website, they can take photos of the property and of the specific apartments. They can shoot video tours. They can use the content to show people exactly what the property currently looks like.
Lease-ups are not able to do that, of course. Certainly, animation is to the point now that one can create fairly realistic animated videos that show what the property will look like when finished. But that is not the same thing as an actual photo of a finished unit. It also suffers a bit due to the first problem we raised: trust. If people don't know that they can trust you yet, they may not feel confident trusting the video you've created that shows what the property is going to look like when completed.
The best thing you can do to help with this is to be as transparent as you can be about the property. Animated photo and video are good as a start. Getting actual photo and video up as soon as possible is also important. Finally, where there is potential for a prospect to be surprised by something, do your best to alert them to the issue ahead of time so that it isn't a bad surprise. If your animated video tour does not completely match the floorplan they're interested in, tell them that. Do everything you reasonably can to help people see that you are not trying to take advantage of them.
Third, you don't have long-term systems in place to help with managing the many tasks facing a property manager, leasing team, or marketing director.
This is the final problem and is arguably the most annoying. There are a ton of things besides leasing and marketing that go into running a successful multifamily community. You need to maintain the property, which requires a maintenance staff. You need to collect rent and manage your books, which requires accounting. You also need to assist residents with questions or any necessary repairs around their unit. You also need to be managing rent rates so as to make sure your property is running as efficiently as possible and is bringing in as much revenue as it can.
If you're a regional manager overseeing a larger portfolio or a marketing director responsible for many communities, you have even more additional responsibilities on top of those day-to-day things.
With established properties, there are often systems and routines in place that make a lot of this a bit easier to manage. The property is ten years old, the staff has been around for a few years, you've been through a few tricky things together... in short, you have a sustainable arrangement.
With new properties, you don't have any of those things. So on top of all the actual work we have just described, you're also working on your work, as it were. You're trying to build systems and establish routines that will help you do your work better. You're figuring out what rent rates different floorplans can carry, how long it takes to do ordinary maintenance on the property, how efficient your leasing staff is, etc.
On this point, some of the problem is inevitable and you simply have to push through. The systems and routines have to get built and building them is hard. But you do get it done eventually. That said, whenever you can avoid reinventing the wheel, you should try to do that. If your other properties have a leasing system in place that works, just copy it. If you have a similar property in your portfolio, use that as a starting point for setting rent rates. You still will have to measure and adjust to get the best possible results, but if you can start in a better place then it will not be quite so difficult to make adjustments when the time comes because hopefully the adjustments you need to make won't be as dramatic.