With the tanning season finally setting in, we expect to enjoy a lot of barbecues and evenings at the beach. Well, most, but not all will be doing so. As a matter of fact, with the summer season being the most engaging time for a realtor from a management and marketing standpoint- according to New Castle-based Castle Lanterra Properties CEO ElieRieder– real estate professionals will be swamped by work until the end of the season, as prospective tenants rush to lease vacation rentals. It’s the vacation season alright, but not for people in real estate and hospitality industries.
According to Zillow, although rental property rates were predicted to flatten and possibly even depreciate half as fast in some areas, 2016 has proven to be a year of surprises. Rental properties, on the contrary, have substantially appreciated even more than 2015, recording a 4% increment compared to last year’s pre-summer prices. Going by these reports and the bust of activity during summer, rentals may possibly replicate last year’s trend and surpass corresponding home value rates, which have risen by 4.9%.
That may be bad news for consumers, but definitely promising for rental agencies and property owners. The rise in prices is a clear indicator of the corresponding growth in demand. Therefore, theoretically, we should see a rising demand in rental properties this year, particularly during the months of summer. This however, doesn’t automatically translate to improved incomes for property owners and rental agencies. To cash in handsomely, of course, you need to be sufficiently strategic. And that means adequately preparing for the long summer leasing season.
So, let’s look at the top 5 ways to do so…
Handle Large Maintenance Projects During Winter and Spring
Sure, it may seem like an obvious and pretty basic thing to do, but unfortunately, many property owners do not really put a lot of thought on the timing of their maintenance projects. They consequently lose out on a lot of lucrative income by conducting them during what would have been their peak months. While you may feel that you also need to cash in during winter and spring, most Americans move into new rented properties between May and September.
To capitalize on this trend, of course, all your large maintenance projects should typically be scheduled at mid to the end of winter, through spring. Landscaping for instance, should be done through spring, to subsequently showcase the properties at their most beautiful state during summer. Additionally, your maintenance projects should principally seek to restore all the down units back to “rent ready” status before prospective tenants begin trickling in.
Upgrade and Streamline Your Digital Processes
Well, even with few rental units, a rental system that entirely relies on manual processes has many weak-points that will not only make you lose out on prospective tenants, but also potentially cripple your business. We are living in an age where success against your competitors, in almost all types of businesses, greatly depends on your overall tech strategy. It is therefore advisable to begin adopting tech solutions that would efficaciously streamline and optimize all the processes within your rental business.
While a significant number of property agencies are now accepting applications through their online platforms, you should consider going a step ahead of them and digitize your entire operations. With an effectual property management software, you could even offer applications through smartphone apps, and even track all your units from the comfort of your tablet or PC. Additionally, your system should also facilitate digital signatures and securely process paperwork after screening and qualifying all your applicants. This will not only give you an edge over your competitors, but also save you time and improve overall business efficiency.
Engage Your Tenants
A national survey by apartments.com showed that in 2015, approximately 25% of renters were expected to look for a more affordable apartment. By narrowing their search by dollars bills, especially in a time where there are many move-ins and move-outs, you could risk losing your tenants to cheaper apartments. Fortunately, apartment executives advise that to boost occupancy during this period, there is more than just price to consider. According to these executives, unit and curb appeal as well as great customer service are big selling points.
Through solid customer service for example, you can engage your existing tenants in a bid to retain them. Troy Perkins, a regional property manager for Pinnacle says that rental managers ought to be consistent with their marketing. Perkins, who oversees 1000 units goes ahead to say that the best way to take advantage of any leasing period is to have a finely strategized marketing effort.
A good way to do this is to send your tenants summer preparation tips in your newsletter, before summer, identifying potential maintenance issues, how to avoid them and deal with them in case any problem occurs. Additionally, you need to improve your team’s response rates to build stronger relationships with your tenants, thereby increasing your retention rates. Based on your projections and previous experience, you also need to hire enough maintenance personnel and buy necessary equipment before-hand, to boost the quality of your response.
Provide Your Team With The Necessary Resources
With the expected surge in leasing activities, your business is bound to experience an immense workload that requires certain set of skills to effectively handle the pressure. While hiring new and better skilled personnel seems like a very viable option, a report by the Center for American Progress tends to disagree. According to the Center, the direct cost associated with replacing an employee is roughly 20% of the employee’s salary. Remember that there are other indirect costs such as the time taken to find the most suitable person to fill the vacancy. This time could instead be used to train your existing personnel.
Instead, before the summer leasing season kicks in, you should allocate enough finances to your training budget and ensure that your employees have access to proper training and required technology, to handle the rental process. Additionally, if you cannot avail all these required resources to your staff members, get into third-party deals with trusted vendors and draft an execution plan before the surge. Let your staff members work before-hand with any third-party providers, to allow them build a working relationship early enough.
Lastly, the surge could mean that your staff members need to work extra hours. This means that you need to work out a remuneration plan for your leasing agents and adequately budget for it. During this time of the year, this kind of extra investment can sure pay off, so don’t be afraid to ask your agents to prepare for extended periods and pay them for the extra time, as a motivation tool.
Establish Yourself As A Thought Leader
Establishing yourself as a thought leader is a continual process that starts way before summer or any peak leasing period. Basically, this is your chance of establishing yourself as the go-to business as far as rental advice is concerned. To do this successfully, you need to update your blog with the latest news and updates, trends as well as advice in the rental market.
Remember that your intention at this point is not to sell anything, but to simply advise your audience on what’s hot and what’s not as well as do’s and don’ts in the industry. This is a slow but sure way to reap big, come the peak season because, like any other consumer, apartment hunters expect to learn when purchasing a product. Establishing yourself as a thought leader in this instance builds a high level of trust, increasing their probability to do business with you.
With the projected rise in demand for rental properties in the months of summer, you should ensure that you are well prepared to handle the surge. This is the busiest leasing period in the American calendar and failure to capitalize on the opportunities presented during this period could cost you a great deal on your annual returns.
It is therefore advisable that you observe market trends, get the required financial and technological resources and make them available to your team. For example, you could consider getting your team smartphones to effectively handle digital sales and marketing. After all, as we discussed, investing in your business at this time is highly advisable as the returns are totally worth it.