Undercover Resident: The Genesis of a Community s Reputation June 14, 2018 8:45 a.m. 9:45 a.m. Sponsored by
Meet the Experts Chris Beckwith-Taylor Joya Pavesi Jackie Ratzlaff Pat Patterson VP of Marketing VP Marketing + Strategy VP of Growth Initiatives Director Multifamily Franklin Johnson Group Rivergate KW Apartment Life, Inc. PetScreening.com Moderator
Polling
Polling Question #1 I ve been at my current position for 1. Less than 1 year 2. 1 2 years 3. 2 5 years 4. Longer than 5 years
Multifamily Property Management is a terrific profession. We work with people at the most intimate level of their life Their Home! The Professional Advantage. Professionally managed apartments not only offer a greater degree of financial security, they also provide residents with a much higher standard of service, including on-site maintenance, first-class amenities and a higher standard of customer care. The Financial Advantage. Renters save an average of $560 every month just by choosing to rent over buying a house. And they don t risk investing in a depreciating asset. A $100 investment in housing in 1985 would be worth $293 today; that same $100 placed in stocks would be worth $1,146-nearly four times as much. The Risk is Real. Nearly 40 percent of today s foreclosures involve a single-family house, condominium or other housing rented out by its owner. (This slide and the next are courtesy of NMHC Advocacy Tools)
Renting Can Be a Smart Investment Don't Buy the Myths! Myth: I'll reduce my tax bill if I buy a house. Reality: A majority of homeowners reap no annual tax benefits from owning a house. Myth: Paying rent is throwing away money. Reality: The first five years of ownership, you are giving away your money to a bank. Nearly 1/3 of all buyers move within five years, before they start building any real equity. Myth: My mortgage payment will be less than my rent. Reality: Your mortgage payment is just the beginning and "hidden costs" of ownership can add up to $1000s/yr Myth: As an owner, my housing costs will stay constant. I won't have to worry about rent increases. Reality: Your mortgage may remain constant, but other costs, such as maintenance, insurance and property taxes can go up significantly every year. Myth: Investing in a house is a safe investment. Reality: The bursting of the housing bubble made it clear that house prices go down as well as up. But even in a healthy housing market, stocks and bonds often still offer a better return.
Renting Industry Is Integral To 35% Of American Lives Renting & Owning Populations As of 2016 250 200 Population By Tenure (Millions) 204.0 150 100 111.1 50 0 Owning Renting Sources: U.S. Census American Community Survey (1-year estimates); CoStar Portfolio Strategy As of 17Q4
Apartments As An Asset Class Are Valued At $1.7 Trillion U.S. 54 Major Metros Market Capitalization $3.0 Market Cap ($T) $2.5 $2.4 $2.3 $2.0 $1.5 $1.7 $1.0 $0.8 $0.5 $0.0 Retail Office Apartment Industrial Source: CoStar Portfolio Strategy As of 17Q4 *Market Rate Apartments >=5 Units
42 Million Households Rent, Primarily In Apartment Buildings U.S. Housing Stock & Renter Households U.S. Housing Stock (Millions of Units) Renter Households (Millions) 30.6, 27% 15.3, 36% 81.5, 73% 26.6, 64% Single-family Multi-family Single-family Multi-family Sources: U.S. Census American Community Survey (1-year estimates); CoStar Portfolio Strategy *Excluding Mobile Homes & Other Housing As of 17Q4
Every Age Group Is Renting More Today Than Ever Before Homeownership Rate Index By Age Of Homeowner From 1990 To 2017 115 Homeownership Rate Index* (100=1990) 110 105 100 95 90 85 90 92 94 96 98 00 02 04 06 08 10 12 14 16 < 35 35-44 45-54 55-64 65+ Sources: Moody's Analytics; U.S. Census Bureau (CPS/HVS); CoStar Portfolio Strategy *Three-Quarter Average As of 17Q4
Multifamily Will Increasingly Be The Preferred Option For Both Young & Old Renter Household Growth By Units In Structures 2014-16 0.6 Renter Household Growth (Millions) 0.5 0.4 0.3 0.2 0.1 0.0 (0.1) Multifamily Single Family 2-4 Units Growth (2014-16) Sources: American Community Survey 1-Year Estimates; Moody's Analytics; CoStar Portfolio Strategy As of 17Q4
Polling Question #2 How many times per day does someone in your office interact with a resident? (phone, email or in-person) 1. 1-5 times 2. 6-10 times 3. 11-20 4. More times than I care to count
What do Residents Really Want? Resident Resident Survey: Top Factors That Impact Residents Choosing Apartment Living CONVENIENCE LARGER UNITS 4% 2.7% SENSE OF SAFETY 2.7% FASTER MAINTENANCE 1.3% COST, RENT FREEZE 13% FINANCIAL EQUITY, INCENTIVES OUTDOOR SPACE, GREEN SPACE SENSE OF COMMUNITY 23% 25% 28% 0% 5% 10% 15% 20% 25% 30% Survey of current residents conducted in 2018 at Apartment Life, Inc.
Why is it so easy for apartment residents to move out? Factors related to move out OTHER 3.0% LIFE STAGE 22.3% PRICE/INCENTIVES OF COMPETITION 32.0% POOR SENSE OF COMMUNITY 16.2% LACK OF FINANCIAL EQUITY 27.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Factors Survey of current residents conducted in 2018 at Apartment Life, Inc.
Drivers That Impact a Prospect s Likelihood to Rent An Apartment Prospect Rank Aspects Multifamily Professional Rank 1 Rent and value that you would receive for the price 1 2 Appearance and features of the apartment home 4 3 Community facilities and services 8 4 Appearance of the community 5 5 Trying to help you find a home that met your specific needs 6 6 Overall, in terms of their presentation 11 7 Location of the community 3 8 Adequately answering your questions 7 9 Being Courteous, friendly and professional 2 10 Asking questions to determine your needs 9 11 The information shared about the apartments 12 12 The information shared about the community s amenities and services 10 January 2018 Multifamily Insider surveyed property management professionals on what s most important to residents.
What aspects are most likely to impact a residents decision to renew?. Prospect Rank Aspects Multifamily Professional Rank 1 Value for the rent that you pay 2 2 Sense of community you feel among residents and the onsite staff 1 3 Community social media (Facebook page, etc) 26 4 Appearance, condition of your apartment 14 5 Community sponsored social activities, events 23 6 Neighbors 6 7 Would you recommend your community to a friend 22 8 Responsiveness, dependability of onsite and maintenance staff 4 9 Ability of the office staff to hear your requests and concerns 3 10 Prompt response by office staff to calls and/or emails regarding request 10 Combined study; SatisFacts and The Franklin Johnston Group; What drives prospect s decision to renew. (order of importance)
Living at the Ritz It s a culture, not a program! The Ritz Carlton Leadership Center leverages their systems and processes so other companies can improve customer and employee engagement, innovate their culture, and differentiate themselves. Experience Exceptional Service Exceptional Service for Team Members Exceptional Service for Residents Exceptional Service for Clients Leasing Advantage Signature Service creates a brand It s a tool during follow up, closing and move in. Changes the conversation from technical to experience Renewing Advantage Signature Service becomes a staff culture It s a whole new language that residents become accustomed to Changes in titles to enhance the culture and employee career paths
How Are We Doing?
Multifamily ReThink Tank Today s prospects are informed before they contact the community. Find out what they know; how they know it and then individualize each tour A lease is a $15,000 to $36,000+ purchase! The largest purchase anyone will most likely make in a year. Yes, leasing is a sales position. Begin by revealing what life will be like living at a community.
Multifamily ReThink Tank Treat me like a member of this community. Make wise use of your and my AND ensure I have access to everything I pay for. Make the renter s decision to leave, excruciatingly tough. When residents are embedded in a community, they have strong connections. Find and to create a pleasant living environment. Remember EVERYTHING is new to the new resident!
Do you know who you are renting to? ReThink Marketing, Training and Leasing.Develop Personas Develop Your Personas Jon Simpson, CEO Criterion.B Agency Multifamily Branding
Be Bold Based on our findings from the ReThink Tank Ideas for a New Staff and Operations Structure ReThink your property management operations to Succeed within the box and then Soar outside the box RETHINK the leasing desk into a 24/7 sales center RETHINK site titles and job responsibilities RETHINK compensation for site staff RETHINK staff hiring to include Life Stage Experts RETHINK marketing to incorporate community and social strategies RETHINK training from technique to understanding personas RETHINK policies, procedures and technology RETHINK incentives for leases and renewals
Would various incentives for leases or renewals impact the renter decisions? Residents Suggested Incentives to Build a Sense of Ownership Access to a private green space and/or community garden with renewed lease Pet rent or pet fees reduced, or access to upgraded pet amenities Storage space provided ie: garage, storage with renewed lease Rent freeze for set number of years with longer renewed lease Money building up in an account for each month, with access after a set number of years. Yes No Appliance ownership program (washer/dryer, refrigerator, other appliances with renewed lease)
Panelist Q & A These are real resident questions so we hope you have some good ones! Why are you asking me to pay the past due rent? This is my son s apartment and I m just living here. I can t help it if he moved out! Do you have my Amazon boxes? Also, I'm going to be late on my rent this month. Is it OK to pay my December rent with my HSA, I have funds to use in there? Your pet fees state that it is $200 for the first pet, $150 for the second pet. So how much would it be for my 3 chickens?
Contact Information Chris Beckwith-Taylor Joya Pavesi Jackie Ratzlaff Pat Patterson Cbeckwith@tfjgroup.com JPavesi@rkwresidential.com Jackieratzlaff@apartment life.org Pat@PetScreening.com