Having helped many clients navigate the launch of new apartment communities, one thing we've learned is that the marketing tools necessary to execute a successful lease-up come with a significant price tag.
An apartment lease-up refers to the period of time between when your new community is announced to the point at which it's achieved target occupancy and residents are paying at or above market level rent. You want your apartment lease-up time period to be as short as possible because you want to start generating revenue as soon as possible. However, the up-front marketing costs required to meet that completion goal can be daunting.
For a lease-up to be the most successful, you should be willing to spend more on your marketing during that time period. That investment directly determines how fast the lease-up will go as it directly influences your leasing velocity. Seeing these costs as an investment is the right way of thinking about it, too. You will never see a higher return on your marketing spend at any other stage of your apartment community's existence than during the lease-up.
Video: How To Think About Your Marketing Investment In A Lease-Up
There's two specific marketing investments you should make to ensure a fast and financially-rewarding lease-up:
Investment No. 1: A Community Website With Floorplan-Specific Media Content
Your apartment community's website is your most important marketing tool and, thus, is also the most important investment.
Hiring a web developer as early as possible in the lease-up should be one of your top priorities. This is because the sooner you begin establishing your new apartments' online presence, the more authority and trust it can build with both search engines (like Google) and prospective residents in the months leading to when the community officially opens.
Next, you need to also find a marketing vendor who can produce floorplan-specific media content, such as photos and walkthrough video tours. Featuring these on your website will help it serve as the lease-generator you need it to be, as prospective residents want to see the inside of your units before ever making the decision to schedule an in-person tour or sign a lease.
For some new properties, it may be difficult to schedule a media shoot very early in the lease-up process because units are still under construction. One way to overcome this obstacle is to utilize renderings from your builder and have your web developer put those up on your website in the interim. Or you can take it a step further and hire a media producer who's capable of creating a video simulation based off those renderings so prospects can still take a tour and get a feel for what your new apartments will be like.
The Return
While this may increase your initial marketing spend, the payoff over time will be noticeable because you'll be providing a helpful website with features that will make your community stand out amongst competing properties, and make more prospective residents excited about the potential of moving there.
Investment No. 2: Digital Advertisements
In order for your website to convert leads into leases, you need to have a method for driving prospective residents to it. This is where digital advertisements come in.
Once you've established your online presence, you'll need to invest in digital ad campaigns on both Google and Facebook. There's a direct correlation between the amount of money you spend on these campaigns and the amount of traffic they generate. Considering that you're in a lease-up, you need to be prepared to have a higher ad budget than normal because you have 0% occupancy.
The Return
Here's why you should feel even more secure about this investment: let's say that on opening day you're going to have one building with 40 units that rent for $1,000/month go live. If you're able to lease only one of those units every 3 days, it will take 120 days before that one building is fully occupied. In that scenario, each unit in that building is going to sit vacant for an average of 60 days.
If you're also spending $1,000/month on a marketing source like Google Ads, you'll still have a net zero return on your investment as long as you're able to attain one lease every two months.
Obviously, this is an extreme example. You'd still want to lease units more quickly to actually generate an ROI, but that is the point—your digital ads don't have to be all that efficient for them to still generate a positive ROI.
Conclusion
Though quality websites and digital advertisements are expensive up-front marketing costs for new apartment communities, they're worthwhile investments—and more property management companies should feel comfortable about utilizing them during lease-ups because of their significant return.
For more helpful information, download and read our ebook How To Execute A Successful Apartment Lease-Up by completing the form below.