Understanding how to develop a marketing plan for a Multifam

Understanding how to develop a marketing plan for a Multifamily property that will Reach its Target market

Successful residential management is not only about a well-run property.

Rent- Fixed monthly rent is the most common form of income for mulit family housing.

NOI-Net operating income represents the amount of money that remains after operating expenses are subtracted from actual receipts.

Gross Potential Income

Less Loss to Lease

Less Vacancy and Collection Losses

Plus Miscellaneous Income

Plus Expense Reimbursements

Equals Effective Gross Income

Less Operating Expenses

Equals Net Operating Income (NOI)

NOI is the primary measure of a property’s performance.

Effective Rent-The effective rent is the total rental income derived from the apartment for the entire term of the lease after it is divided into equal payments over the term of the lease.

Visiting your competitors will show you exactly what you are up against in terms of competing properties, and you can play up your property’s strengths compared to others.

1. Describe the subject property and determine an apartment type

2. Determine the features

3. Identify the competing properties

4. Determine the features of competitor properties

5. Determine the value of features

6. Total the value adjustments

7. Analyze the adjusted rents

Consider the pricing strategy that will provide

the best yield for the property

The “four Ps” of real estate management marketing:

​​ PRODUCT: quality, location, features, amenities, size, age, reputation

​​ PRICE: rental rates, security deposit, concessions, lease term

​​ PROMOTION: advertising, public relations, canvassing

​​ PEOPLE: training and preparing staff

Marketing Reports

It is important to track the status of marketing activity. The level of detail and number of reports used by management or requested by the property owner will vary. The following reports will provide a summary of traffic (in most cases owners will prefer to see a summary report):

PROSPECT TRAFFIC REPORT:

WEBSITE TRAFFIC REPORT:

TELEPHONE LOG:

INTERNAL MARKETING REPORT: These reports record the frequency of advertising (ILS ads, print ads, direct mailings, billboards, broadcast ads), public relations events, and canvassing. They can report on the effectiveness of techniques and identify areas in need of modification.

​​ LEASING ACTIVITY REPORT: A leasing report keeps the owner informed of leasing activity such as active prospects and signed

Communications

​​ Problem-solving

​​ Timeliness

​​ Legal compliance

​​ Sales

Professional communication

​​ Ability to juggle duties

Lead to lease!!!

Follow up

Scheduling

Application

Processing

Notification

Renewal rewards

Scheduled inspection for apartment

Security deposit reduction

​​ Returning the security deposit has the extra advantage of partially offsetting any rent increases

Develop strategies to increase resident retention

Conviction, satisfaction, loyalty, goodwill, commitment, experiance

Develop an effective system for complaint investigation and resolution. This is a major part of making a resident happy and directly reflects management

Key message and strategy

​​ Should be what you wish to relay to your target market to distinguish your property from others.

​​ May be carried in the brand or theme, but are not limited to it.

​​ Should focus on the most important strengths for prospects: location, cost, in- unit features (design), etc.

Timetable

​​ Establishes a schedule for planning, production, and release of marketing pieces, public relations events, site visits, etc.

​​ Provides a means for plotting your goals for the property to a calendar and determining how long it takes to achieve them.

Conclusion

Purpose

​​ Will be shaped by the owner’s goals. How do the assumptions, methods, timetable, budget, and assessment reflect the owner’s goals?

​​ Should be planned to position the competitive advantages of the property.

​​ Should be spelled out clearly and apply to all levels of the leasing staff.

​​ Should contain SMART goals (Specific, Measurable, Agreed-upon, Realistic, and Time-based).

Budget

​​ Specifies the money allocated for each activity that is related to marketing the property.

​​ Requires knowledge of the costs that are likely to be incurred as well as the availability of funds to pay them.

​​ May or many not include ongoing marketing costs for resident retention.

Assessment

​​ Indicates assessment benchmarks for fee- based expenses, software or web-based analytics to be used, and notes on qualitative assessment of non–fee-based marketing efforts.

Target market

​​ Should identify the segment of the overall market that seeks the characteristics of the apartments and can afford them.

​​ May be shaped by your existing resident profile and resident survey data.

​​ May shift when ownership goals change.

Brand focus

​​ Should be a strong, visual/image-driven concept of the brand that consumers easily identify.

​​ May be corporate “brand umbrella” that is

applied to the property or an image, logo, icon, or concept that is developed to be unique to the property.

​​ Should the property develop its own theme, it is important to ensure the theme is compliant with corporate brand messages where applicable.

Questions..

Creating a marketing campaign and implementing successful marketing tactics will attract prospects to the property and lead to signed leases.

7 steps of comparative analysis

Cost vs. what the market will bear

Know what your operating costs are and what you need for them

​​ Analyze vacancy rates—high vacancy rates will drive down the

market price

​​ Determine what competitors are doing—are rents lower than expected?

​​ Brainstorm: what can you do to increase income if you reduce rent?

​​ Adjust rents from cost to what the market will bear

Target Market and Resident Surveys

Whether your marketing efforts successfully increase traffic at the property will depend on how

well you know what factors informed the residents’ decision to join the community. As noted, one of the strongest sources of data concerning your target market is your resident survey. Data that are particularly important include:

​​ Employer

​​ Previous address

​​ Gender

​​ Industry

​​ Number of occupants

Put simply, revenue management starts with identifying how the following factors may impact the decision to purchase the product:

​​ Seasonality (based on as much as three years’ history)

​​ Recent demand level

​​ Lease application lead times

​​ Traffic

​​ Lease lengths

​​ Lease agreements starting from the beginning, the middle, or the end

of the month

​​ Concessions/incentives for renewal

​​ Future supply

​​ Early termination adjustments (skips, evictions, and other lease breaks)

​​ Unit type

As you can see, revenue management is both a pricing strategy and a lease administration method. In other words, this strategy balances new resident rent prices and the schedule of rent increases/incentives for retention of existing residents.

Pattern pricing

Is simply finding a price that works and as you go up in rooms you go up in rent this was used at the last property i was at Avesta highlands where

1 bedrooms were 595 2 bedrooms were 695 and three bedrooms were 795

Best of type pricing

Arrive at the optimal price.

Is very close to pattern pricing just more detailed. Taking apartments into groups instead of separating them by distinct factors such as 1 or two bedrooms this is used more so set price differences with similar type units and is a more detailed grading system

REACH:

FREQUENCY:

ONGOING:

SUPPLEMENTAL:

Social networking

Use can use the analysis to develop a comparison grid and establish market rental rates.

ADVERTISING: any paid form of presentation and promotion of the property.

Advertising consists of a number of activities, from creating attractive property signage, to broadcasting the availability of vacant apartments, to showing a prospective resident an available unit. The property’s brand should remain an important element of each of these components.

Direct Marketing

Direct marketing is the use of leasing agent-to-prospect channels without using marketing middlemen. These channels include direct mailings and e-mail broadcasts.

Promotional Materials

Promotional materials include brochures, flyers, and portfolios that are passed out to prospects.

I learned a big difference here when avesta was getting there brand and theme worked out

Signage

Property signage is one of the first things a prospect sees at the property.

“BRAND” VS. “THEME”

Often lumped together, brand and theme should be differentiated.

Brand: The overall concept created to reflect a “feel” or “perception” that your property creates. It is a psychological image projected to prospects and residents about what life is like at this place of residence.

Theme: Images, ideas, or symbols that are used to convey a message that can be adjusted for different communities or time-based at a single community.

Amount of Occupied Units ÷ Total Amount of Available Units x 100 = Occupancy Rate

Advertising Techniques

What do I get?

What does it cost?

How do I find it?

Cost of Marketing ÷ Number of Leases Signed = Cost per Signed Lease

For example, if there are 1,000 available apartments in an area, and 963 of the apartments are rented, the occupancy rate is 96.3% (963 ÷ 1,000).

Cost of Marketing ÷ Number of Prospects = Cost per Prospect

Analyze the competition.

Amount of Vacant Units ÷ Amount of Available Units x 100 = Vacancy Rate

Using Ratios

One of the most important quantitative measures of success is cost effectiveness. If a marketing campaign costs $14,000, it will need to draw in enough leads and eventual occupants to cover that cost. If this campaign nets three new occupants whose rent payments total multiple times that expense, the campaign has been a success. By estimating

Marketing campaign costs, you can determine in advance the needed break-even response rate. Cost effectiveness is often calculated using ratios such as cost per prospect and cost per signed lease.

Cost per prospect is the ratio of marketing costs to the number of prospects attracted to the property:

If those same 1,000 available apartments were 96.3% rented, the vacancy rate in this case would be 3.7% (37 ÷ 1,000).

Absorption

Property website

Search engine optimization (SEO)

Adwords (Google)

Banner advertising and rich media

Property management company website

Classified advertising

Apartment search websites/ILS

Apartment locater services

Print display (Apartment guides, brochures)

Other forms of advertising

Supply and demand

SUPPLY:

DEMAND:

​​ An “owners market” is when supply is below demand; a “renters market” is when supply is greater than demand.

Also commonly referred to as “strong markets” or “soft markets.”

Evaluating Results

Analyzing these reports will reveal the effectiveness of different marketing tactics used in your marketing plan to determine the ROI.

​​ The two most important questions you can ask yourself are:

​​ Which techniques produced the most interest in the property?

​​ How will I modify the plan to be more effective in the future?

Units vacant at the beginning of the period

plus Units constructed or created during the period

minus Units demolished or owner-user occupied during the period minus Units vacant at the end of the period

equals Units absorbed during the period of time

Occupancy and Vacancy Rate

​​ occupancy rate:

​​ vacancy rate:

​​ Vacancy rate includes vacant apartments in existing communities, plus vacancies in new construction ( The un leased inventory of newly built apartments), but excludes vacancies that are, for any reason, not available for occupancy.

How to Evaluate an Ad

Almost all advertising pieces can be evaluated by the following criteria:

​​ Does the piece grab the prospect’s attention with sharp graphics or headlines?

​​ Is the ad based on your assessment of the target market and their desires?

​​ How clearly does it communicate appealing features of the property, especially its competitive advantages?

​​ Does it maintain consistency with the property’s image and theme?

​​ Does it end with a “call to action” that prompts the reader to respond

by calling or visiting the property (e.g., “Come by and see us today!”)?

Keys to resident retention

Absorption

​​ Absorption:

​​ Absorption should account for both construction of new apartments and demolition or removal from the market of existing apartments.

The big picture 4 A's

Customer relationship Management

Analyze the property.

Analyze the neighborhood.

Analyze the competition.

Arrive at the optimal price.

What Matters to Residents

Knowing how to market your property effectively means knowing what the market wants.

In general terms, prospective renters will normally choose a neighborhood to reside in based on the following factors:

Location

– Employment

– Crime

– Family

– Shopping

– Highways

– Public transportation

– Schools

– Noise

– Airport

– Hazards/Nuisances – Congestion

– Recreational opportunities – Medical facilities

Review the lease expiration dates, renewal strategies, cash flow needs, and neighborhood vacancy/absorption rates every thirty days.

The more active the approach you take to managing your best pricing strategy, the likelier you are to maximize the return of the owner’s asset.

Stages of a Neighborhood

Everyone on staff may impact the prospect’s decision to lease or renew at the property.

DEVELOPMENT: A developing neighborhood has increasing real estate values.

MATURITY: When real estate values plateau,

DECLINE/BLIGHT: Urban neighborhood decline is often driven by the sudden loss of nearby jobs and by population decline due to broader trends in suburbanization.

REHABILITATION: Private and public investment increases values so that the income level of the resident profile changes from low to adequate or high.

In-house market surveys- interviews, surveys,

Location- again the site Site must be evaluated for access to residential areas, businesses, schools and college campuses, offices, and neighboring employers. Transportation issues influence the desirability of your property. If the target market is likely to commute, is the freeway access convenient? Is mass transit available within walking distance?

Surrounding property's will affect the image of the property

Space and amenities and property appearance are also big factors

Effective Rent and Concessions

RETENTION = VALUE

New customer Current customer

Marketing Effort

High Moderate

Value to Marketer

Low High

Now we know some vocab we can dive into the this next section. We are now going to learn how to do a market analysis

Determine features of the subject property

(know the asset)

Analyze the neighborhood and regional market

(know the competition)

Determine competitive advantages

(evaluate the position)

Conduct rent-setting method

(implement pricing strategy

Basic Economic terms

The objective is not just to lease apartments; it is to keep apartments leased.”

Since management is acting in the best interest of the property owner it must determine the optimal rent that will attract the optimal tenant.

Number of Leases Signed

÷ Number of Prospects

= Conversion Rate

Source Cost of Marketing

÷ Number of Prospects

= Source Co

Tax credit

Tax credit housing refers to a tax credit allocated by the federal government through the states. Investors purchase these credits, which allow developers to offset the cost of constructing or rehabilitating apartments for low-income residents at restricted rents.

Housing credit developments must rent at least 40 percent of their apartments to residents who earn incomes of 60 percent of the median or less, or 20 percent to residents who earn 50 percent or less.

Challenges include:

Ensuring the resident’s income is within guidelines

Working closely with the state to ensure compliance to regulations

Meticulous paperwork,

And detailed recertification procedures.

There are many specialty areas for residential property management.

Government- Assisted Housing

Government-subsidized housing includes management of Public Housing Authority (PHA) properties and privately owned properties that include renters receiving public aid for housing costs.

Income qualifications for prospects may include government rent-controlled vouchers or other forms of project-based assistance.

Unlike conventional housing, subsidized housing has unique marketing and leasing requirements—some regulatory, some due to the nature of the property type.

Building type- is Garden/ low-rise - most of Avesta's properties. Mid-rise, High-rise or Mixed-use are others.

Unit Mix- Unit mix is defined as the distribution of different-sized apartments in a rental property

Property class - properties are classed in three groups A, B, and C.

I found this very important when leasing since it was a key factor every prospective resident wanted to know they are always aware of the square feet

Location- transportation,

Convenience to employment,

shopping,

education, and crime rates.

Location -will impact resident profile and Rents.

Unit size,

Area

and Layout

Does unit mix allow for changes in demand from highest and lowest income level prospects?

Unit Mix Details