If you’re managing more than 10 units, it’s time to change how you think about leasing. Every time you allow a unit to become vacant for one month between tenants, you lose 8.3% of that unit’s potential revenue. The good news is that if you have a 10-unit property and a unit sits vacant for a month, it’s really only a 0.83% loss of revenue. However, if you turnover 4 apartments on average, letting these units sit vacant results in a 3.3% revenue loss. In real dollars, if the average rent is $1,200, you have a $4,800 loss of annual revenue. If you are looking to sell or refinance, the impact is significant. At a 6% cap rate, $4,800 of additional NOI amounts to $80,000 of value. The bottom line is that you want to avoid letting your apartment sit vacant. This means you need to know when a current tenant is moving out. You do not want to learn this just a few days before they leave. Leasing begins with renewals! Send out renewal notices early (remember in Chicago, you need to do this 120 in advance for any tenant living in their home for 3+ years). Follow up with them to sign their renewal or confirm they plan not to renew. It’s completely reasonable to expect tenants to commit to their renewal at least 30 days ahead of lease expiration. In fact, 60 days ahead is reasonable as well. Knowing a unit is coming available sets you up to get it leased. Knowing a unit is leased allows you to plan for the turnover between tenants. Knowing ahead of time when you need to prepare and clean an apartment allows you to plan and schedule resources to get the job done quickly. . You may ask, how do you manage turnover when you have tenants moving in and out on the same day, or a day apart? The answer will surprise you. Drexel Properties has been doing this for 21 years and we have learned that overwhelmingly, people are reasonable and flexible. It appears that 80% of the time one of the parties has flexibility - either the tenant moving out can do so a few days early or the one moving in has the ability to move in after the 1st. It turns out that only once in a while you need to deal with what I refer to as the “clown car move” - the move-out and move-in happen the same day. Keep in mind that leases end on the last day of the month and begin on the 1st. This means that people are homeless overnight. Of course in the real world, it doesn’t work that way. The bottom line is, having the lead time, planning ahead, and communicating often will make the transition between tenants go smoothly. If you are on the north side of Chicago and looking for better property management solutions, please contact Drexel Properties for a consultation.
Property Management is a High-Touch Customer Service Business If you think property management is just about managing buildings and collecting rent, think again! Property management, at its core, is a customer service business. Successful Property Managers understand that their customers are not just the property owners, but also the residents who call the property home. Property management is a high-touch customer service business and why it's crucial for property managers to prioritize excellent customer service. Tenants are customers : Tenants are the lifeblood of any rental property. They pay rent, follow rules and regulations, and expect a safe, comfortable living environment. As a customer, tenants deserve to be treated with respect and professionalism. Good property managers respond promptly to tenant inquiries and maintenance issues. They provide clear and consistent communication. Excellent customer service helps build positive relationships with tenants, which leads to tenant retention, positive reviews, and word-of-mouth referrals. Tenant satisfaction affects property performance : Happy tenants are more likely to renew their leases, which reduces turnover and vacancy rates. Satisfied tenants are also more likely to take care of the property, report maintenance issues promptly, and comply with rules and regulations. On the other hand, dissatisfied tenants may withhold rent, damage the property, or even take legal action, resulting in financial and reputational damage to the property owner. By prioritizing excellent customer service, property managers can ensure high tenant satisfaction, which directly impacts the overall performance of the property. Reputation matters : In today's digital age, online reviews and ratings can make or break a business. Property management is no exception. Tenants and property owners alike can leave reviews and ratings on various platforms, such as Google and Yelp. A property management company with a reputation for outstanding customer service is more likely to attract new and retain existing tenants, and maintain a positive brand image. Property owners are customers too: While property owners are technically the clients of property managers, they are also customers who expect professional and reliable service. Property owners trust property managers to protect their investments, generate income, and handle day-to-day operations. Property Managers must be responsive to property owners' needs, provide accurate financial reporting, and keep them informed about property performance. Excellent customer service builds trust and fosters long-term relationships with property owners, leading to repeat business and referrals. Property Management is a high-touch customer service business where tenants expect professional, responsive, and reliable service. Excellent customer service leads to higher tenant satisfaction and retention, positive reviews, improved property financial performance, and repeat business. Property Managers should prioritize customer service as a core aspect of their operations to succeed and be competitive. By understanding and meeting the needs of customers, Property Managers can build strong relationships, foster loyalty, and achieve long-term success.
Anyone who owns a dog or cat can attest that just like humans, pets will likely add additional wear and tear to an apartment’s floors, walls, and other surfaces. Many ap artment owners choose not to allow pets as they feel this move will minimize damage to their units. However, at Drexel Properties we strongly encourage owners to allow pets in their buildings. First and foremost, according to the 2022 APPA National Pet Owners Survey over 70% of U.S. households now have a pet (thanks COVID lockdown!). Every demographic is different, but no matter the community, an owner dramatically minimizes the pool of eligible renters by not allowing pets. This can lead to longer vacancies or even settling for a less-than-desirable tenant; both of which are NOI killers. Owning a pet can also make the apartment unit feel more like a permanent residence. This feeling of stability not only provides a better experience for the tenant but also increases the chance that they are likely to renew. In turn, renewing good tenants minimizes your risks, turnover, and vacancy. Is it best practice to screen each animal? More times than not, responsible people will raise responsible animals. However, Drexel advises not to blindly accept all pets, but to appropriately screen each pet just like you would a tenant. This screening process includes a picture of the animal, talking with the previous housing provider to get their take on how the pet behaved, potentially meeting the animal in person, and if necessary, leveraging a third-party service to dive deep into the animal’s tendency, behavior, and personality. To protect yourself you can also charge a pet fee in the form of a non-refundable upfront payment or an additional monthly charge. Drexel Properties works with owners to determine the best route of action to ensure owners are providing potential tenants with a great experience at a competitive price. Want to learn more about some of Drexel Properties' lessons learned and best practices to accepting and operating with pets? You can reach out at help@drexelproperties.com for a free consultation.
