Rental rates at your apartment community are a function of basic supply and demand. This is why high vacancy during winter months can be so difficult to manage. The demand for apartments is lower because most apartment shoppers lease in the summer and are already locked into a lease by the time winter rolls around. So, if your supply is unusually high and the demand of prospective renters is low, there’s only one thing that can happen, right?
Prices go down.
It’s an understandable strategy—better to lease units for less than you’d like than to have them sit vacant for several months.
But, there is another option: Ramp up your marketing budget.
Let’s go back to the beginning: Your problem is that you have too much supply for the demand. You fix that by lowering the price, which attracts more demand and brings the supply-demand relationship back in line. But, you don’t need to lower prices to increase demand: You can just buy additional demand directly. And in many cases, the cost of buying demand will be much cheaper than the indirect costs you pay to grow demand via reduced rental rates.
How do you buy demand during winter months?
There are two parts to this answer.
First, you make it easier for people to rent from you than it is to rent from one of your competitors.
This alone can make a huge difference. Don’t just take our word for it either. Here is the Harvard Business Review saying the same thing:
Our study bored in on what makes consumers “sticky”—that is, likely to follow through on an intended purchase, buy the product repeatedly, and recommend it to others. We looked at the impact on stickiness of more than 40 variables, including price, customers’ perceptions of a brand, and how often consumers interacted with the brand. The single biggest driver of stickiness, by far, was “decision simplicity”—the ease with which consumers can gather trustworthy information about a product and confidently and efficiently weigh their purchase options. What consumers want from marketers is, simply, simplicity.
If you offer a simpler buying process than your competitor, then you’re more likely to get the lease.
How to Offer a Simple Buying Process
Make it easy for people to find your community on search engines. Doing that requires a correctly set up Google My Business listing as well as an active use of Google Ads in connection with a well-designed community website. You should also make sure you are utilizing sitelinks with your paid search ads. Site links are small links that are slightly indented and run below the main link to your website. They increase the total amount of screen space that your web presence controls on the Google search result page. This is what they look like:
Second, make it easy for people to learn what they need to know about your community. This means giving them walkthrough video tours that help them see their apartment without needing to drive anywhere. In other words: Make it easy for people to learn about your business and your product. That’s how you create a simple buying process. And that’s a huge deal year-round, especially in the winter when the competition for leases is that much harder due to the lack of demand.
Second, you buy traffic via more aggressive Google Ads campaigns.
We alluded to this above when we mentioned using Google Ads as a way of making it easier for people to find you online. But, it isn’t just Google Ads that can make it easier for people to find you—Google Ads can also help you reach a larger audience.
Again, there is a cost that comes with this strategy. You may end up increasing your ad spend from $250 or $500 a month to $1000 or $1500. So, there’s a cost, but again, the key is to compare the active cost incurred from spending more on marketing vs the passive costs incurred from long-term vacancy. In our experience, it’s usually much better to increase the marketing budget.
What kind of traffic can an increased Google Ads budget attract?
There are as many answers to this question as there are apartment communities.
One possibility is that you can simply put more money toward defensive campaigns. This allows you to reach all of the people searching for you by name online.
In some cases, you will already be reaching all of those people. In that case, a bigger ad budget means chasing broader audiences. Perhaps, you can advertise to people searching for “pet-friendly apartments near the University of Minnesota” or maybe “luxury apartments in New Brighton, MN.” The trick is to identify the specific benefits your community offers and then advertise to people looking for those benefits.
By doing this you should be able to reach a larger audience than you typically would with a smaller advertising budget. In other words, you are growing your demand and that increased demand may be sufficient to meet your supply even without lowering your rental rates.
The traditional strategy for handling high winter vacancy is to either ride it out or dramatically slash rental rates. In this post, we have proposed that a marketing solution that simplifies the shopping process and intelligently invests in online advertising can provide communities with another option during these difficult seasons. An effective marketing strategy can be an enormous benefit for your company as you search for ways to maximize revenue and control vacancy.