Leasing a large number of units during the winter months is one of the hardest things to do in the multifamily industry. And, unfortunately, it’s pretty common. Suddenly, it’s December and you find yourself with a high number of vacant units. Now what?
In this post, we will walk you through the best way to handle this type of situation.
Begin with the budget and a bit of math.
You have to spend money in order to fix the problem—that’s a given. The other option is to do nothing and that will actually cost you far more.
This is where some math will come in handy. Let’s say one unit runs at $1,000/mo. If it sits vacant for three months, that’s $3,000 you’re missing out on. If you bumped up your ad spend by $500 for one month, you may get that vacant unit filled and end up saving yourself $2,500 overall.
There’s also a chance that those vacant units could stick around into the summer months, which would cause you to enter peak leasing season from a position of weakness rather than a position of strength. It’s not just that you can’t afford to have a bad summer—you can’t even afford to have an average summer.
If you don’t have one of your best summers ever, you’re going to carry larger than desired vacancy numbers into the fall. Eventually, this creates a spiral in which you’re constantly playing from behind, losses are mounting due to vacancy, and now you really need to spend big just so you stop losing money via vacancy every month.
What we’re proposing, is that you should make a smart upfront investment in marketing to resolve the occupancy rather than stretching out the financial issues indefinitely while you wait for occupancy to organically resolve itself.
Turn to Google and Facebook ads to manufacture demand.
One way of framing your problem when you have high winter vacancy is that you have far more supply than there is demand for your product. To resolve the problem, you can manufacture demand via paying for traffic in Google and Facebook.
Specifically, you can maximize your budget on defensive campaigns on Google (so that everyone who searches for you by name finds your ad), aim for some broader search terms on Google (so you could target both ‘pet-friendly luxury apartments in frisco tx’ and ‘apartments in frisco, tx’)
This is not a long-term solution because it will be more expensive than a more routine marketing strategy. This is why we generally discourage people from targeting broader search terms and have our clients begin targeting more defined keywords.
However, to quickly correct high-vacancy, it is often wise to cast a broader net with your ad campaigns so as to generate a greater number of total leads.
Run attractive specials and highlight them on your website and Google My Business.
No one, other than the renter, loves rent specials. They take money out of your community’s pocket. That said, offering a rent special will usually be cheaper than simply carrying a large number of vacant units for a long period of time.
Here are a few tips on how to make your specials more effective:
- Focus on floorplans rather than community specials. Often vacancy is closely tied to one particular floorplan that is struggling. So, don’t offer community-wide specials when most of your floorplans are turning without issue. Focus on the problem floorplan. Also, by specifically limiting the special to one floorplan you are not only limiting the amount the special costs you, you’re also driving attention to the problem floorplan.
- Use Google Posts to advertise your specials to people searching for you on Google Search or Google Maps.
- If you have floorplan-specific landing pages on your community site, you can feature whatever floorplan you want on your home page. Use the featured floorplans tool to highlight the floorplan that is struggling.
Vacancy is always a challenging problem. During slow leasing seasons it is exceptionally challenging. But, by following the advice in this post, you can get a handle on your problem quickly and resolve it before you roll back around into peak leasing season.
That’s what your goal should be, after all. You don’t want to carry unusually high vacancy into the peak leasing season because that simply puts more pressure on your team to perform during what is an already challenging and stressful time of year. If you can resolve your vacancy problem before peak leasing season, then you can enter that most important time of the business year from a position of strength rather than weakness.