Gone But Not Forgotten

According to a 2009 NAHB Multifamily Preferences survey, the top three reasons why tenants move are for -
1) Better quality place
2) Single-family unit
3) Better location

But what if you could offer your tenant a different property across town that is a single-family home with better amenities and closer to work? Give them a free moving truck for a day and take $500 off the first month’s rent. They just might take it, and you could save a customer!

Did you know your wireless phone provider will bend over backwards to give away free unlimited texting and throw in a new phone just to keep you as a customer? Why would they do that? Because it works. Your wireless company doesn’t make their money by selling phones, but instead on the service plans month after month. That’s where the big money is, and they know the lifetime value of each customer is far greater than the cost of a new phone and a bunch of text messages. Same for your satellite TV, car insurance, heck even the bank that holds your home mortgage.

I've been a Sprint customer since 1998. And paid over $14,000 in wireless charges during that time. So, do you think they balked when I called 2 years ago and asked for a discount on my rate? It took about 2 seconds for them to give me a 10% discount on every bill going forward and 2,000 free text messages.

This same principle applies to landlords and property managers as well. The easiest way to boost your rental profits is by keeping your best tenants longer. If your average rental price is $1,500 per month and your average “lifetime” with each tenant is 30 months, that’s a lifetime value of $45,000. But what if your best tenants stayed a little bit longer, like say 34 months, that’s an additional $6,000 you could generate from each tenant! Not only that, but you defer the risk of picking up a deadbeat tenant when you rent the place again.

When reaching former tenants, use two tactics to your advantage –
1) Timing. Consider how long it’s been since they left; they may be locked in to another lease agreement in their place. So, you should contact them at 10-11 months after their departure, assuming that they are in the 10th or 11th month of a one-year lease agreement and may be up for renewal soon. Your winback message (whether it’s a personal letter, a phone call or an email) should reach them a month or two before their new agreement expires to give them time to consider and evaluate your offer. Just in case they were thinking of moving again at their end of their first year lease.

2) Pain points. You have to address the reason why they moved out in the first place. Often it’s for some external factor out of your control like a new job, bought a home, or such. But for things that you do have control over, address any specific pain points “head-on”.

That is, show how you are different or how you’ve changed to respond to their specific reasons for leaving in the first place. The only chance you have of winning them back to one of your properties is to show specifically how your properties have improved or how a different location is exactly what they need. This is no time for subtlety; so be direct. Let’s face it. It costs your former tenant time, money, and hassle to move out and find a new place. So, to it’s going to take a lot for them to even consider returning.

Maybe it doesn’t seem worth it. Oh, but it is! Of the dozens of marketing campaigns I’ve been involved in, former customers always, always, always respond better and are more profitable to reach than new prospects. A message of “we miss you” or “discover why we’re different” can help get their attention, convey your sincerity and just might put your properties back within their set of options to consider when looking for their next new and better place to live.

The American Dream Redefined

A recent survey found that more than a quarter of Americans currently renting houses and apartments have no intention to ever buy a home.

The survey, by real estate search site Trulia.com, found 27 percent of renters do not plan to ever buy a home. Although 72 percent still expect to buy eventually, that proportion is down from 77 percent just six months ago.

So, is the American Dream of owning a home fading away?
No. But it is being redefined.

People are taking an extra hard look at the pros and cons of home ownership. And for many, renting a place that really fits their needs is the dream.

This is an opportunity for landlords! It means three things:

1) Attract the right tenants. The most successful landlords and property managers know that most tenant problems can be avoided with proper screening upfront, particularly with background and credit checks.

2) Customer satisfaction is more important than ever. Meeting the needs of your tenants pays off as they stay with you month-after-month, year-after-year. Think like a tenant instead of a landlord, and you will start to see opportunities to generate more money from your renters. Not just by raising the rent, but by being opportunistic about how you can better meet tenant needs.

3) Make a new goal - your rental units can be the last and only place your tenants need. Strive to make your properties a place where your tenants can truly settle in and call home.

The survey also found that of those who do hope to become homeowners, two thirds say they will wait two years or more. So, start engaging with your tenants today to build a more successful landlord-tenant relationship. It’s a win-win for both of you!

But what does it mean to “engage your tenants?”
Well, start by communicating. Call your tenants or drop by to see if they have any new needs. You just might learn that they are expecting a new baby, have bought a new car, or recently started a new job.

Be opportunistic and think of how you can make money by responding to new and evolving needs of your tenants
Some examples -
• New baby? Recommend a local babysitter or daycare provider. And give them the opportunity to upgrade to a new unit or home with more space, nicer amenities, a yard for kids to play in, etc.

• Just bought a new car? Give them a coupon for a free car wash. And a great monthly rate to lease a carport or garage that will protect their new treasure.

• Started a new job? Give them a popular audio book on CD or tape. And do you own another property closer to their new work? If so, give them the option to move with a discount on the first month’s rent and a free moving truck to cut their commute down.

These are ways that the best landlords keep good tenants. And keep them happy. It’s so rare in the rental industry to find a landlord who thinks from this perspective. But you can be the first and gain a huge advantage over every other landlord in your market as many of your tenants live out their own American Dream in one of your properties!

Is Turnover Killing Your Profits?

Is Renter Turnover Killing Your Profits?
By Drew DeMasters

Author of Landlord Marketing Secrets

You probably agree that almost nothing is worse than having an empty rental property. Two kinds of costs can hit hard: real costs (like utilities, taxes, maintenance, and cleaning) and opportunity costs (like lost rental income and higher risk of crime).

In this business, we call it the “occupancy rate”. But that’s kind of a cold, impersonal statistic. We can’t really tackle the problem until we stop thinking at the property-unit level and start thinking at the customer level – each of your individual renters who occupy your properties. Here’s a three-point plan to reduce renter turnover.

1. Customer satisfaction.
   Do you really know your renters? You should. How they found you, why they chose to rent from you, if they are satisfied with their experience, if they will recommend others to your properties.

   Answers to these questions are valuable insight you can act on to learn more about who your renters are. But most importantly, it gives you the chance to understand why customers might be leaving you and if there’s anything you can do to prevent it. (there always is, by the way) It’s often because of loud or annoying neighbors, petty crime, or a slow response to maintenance needs. These are things that push your renters to the breaking point, and rightly so.

   So, how do you know if your renters are satisfied? Ask them. Send out a short 5 or 10 question survey to request feedback. And when they give you feedback, share what you learn with your renters. They will appreciate your effort to know them better. Chances are, they’ve never been asked before by their landlord. And you will definitely learn something.

2. Show the value (meet customer needs).
   What makes you different from every other landlord or apartment manager in the market? There has to be something, why else are you in business? Consider what your “competitive advantage” or “unique selling proposition” is. If I am looking for a place to rent, what would tell me about your rental units? Why should I consider renting with you?

   To convince me to rent from you, you need to show me what sets you apart from the dozen other places I looked at this week.

   But to keep me renting with you month after month, year after year, it takes more. You have to show me the value. In other words, you have to keep earning my business.

   So, what are you doing to make your renters stay with you? Send a monthly community newsletter with helpful living tips, recipes, entertainment options, etc. Remind your renters of the benefits you offer: gym, swimming pool, covered parking, convenient location, mail pick-up, etc. Create reasons to interact and engage with your renters. Plan a seasonal party or BBQ. Organize a ping-pong or volleyball tournament. Dream up safe neighborhood activities and events for your renters’ kids. Think outside of the box, and you will begin to see your renters returning the favor through their continued loyalty.

3. Reward your best customers.
   And speaking of loyalty, say “thank you” to your best, most long-term renters. Do something really special to make them feel important. Why? Because they are your biggest advocates. Your future growth as a landlord rests squarely on the shoulders of your best renters.

   And remember how much they are worth to you. Calculate the profits you’ve made over the lifetime of each your best renters. It’s thousands or even tens of thousands of dollars.

   Now imagine one of those best renters moving out. That’s a huge loss you don’t want to see! So, minimize your risk by earning the continued loyalty of your best renters.

Drew DeMasters is a landlord and marketing strategist. His new book Landlord Marketing Secrets is available at www.landlordmarketingsecrets.com
He can be reached at ddemasters@landlordmarketingsecrets.com

Pre-published version of "Landlord Marketing Secrets" now available!

The pre-published version of my new book "Landlord Marketing Secrets" is now available through MrLandlord.com at this link -- http://www.mrlandlord.com/mllshop/clearance.html

The published version should be released in September.

Share of voice

So, a term I learned a few years back is "share of voice." The closest thing I can think of to compare it to is market share. If there are 10 apartment buildings in your town, and you own 1 of them, your market share is 10%. Most of us get that concept.

But what is your share of voice? That's different entirely. Share of voice is a measure of all your marketing efforts, relative to everything else going on in the market at the same time.

Think of a big Thanksgiving dinner with all of your family sitting, eating, and clanging dishes around the table. Conversations are taking place in front of you, on both sides of you, and all the way at the other of the end of the table. Everybody is talking at once, including Uncle Larry.

But then he gets into one of his war stories, his voice getting louder and louder as it goes. Soon, other conversations are dying down as people can't ignore him any more. But Uncle Larry is on a tear, seemingly oblivious that he now has most of the dinner table as spectators.

When many conversations are happening, everyone has a small share of voice - including Uncle Larry. But as others resume eating, and he gets louder, his share of voice becomes too much to ignore. He then dominates the entire dinner conversation.

As landlords and business owners, we need to be like Uncle Larry. With only a small share of your market, many of your marketing efforts may be like leaves in the wind. And it's hard to get noticed, let alone influence anybody to buy. Just open up an Apartment Guide magazine - hundreds of competitors all clamoring for attention: same features, same look, same everything. This is no way to market yourself.

And the irony is that the smaller your market share, the greater your share of voice must be to breakthrough and grab the attention of your target audience. Conversely if you're the big player in your industry, you may be able to spend less putting your message and offer out there because everybody already knows about you.

Think of new ways you can increase your own share of voice in your market and see the results start to pay off like never before!

Just ask

Here's something I'm learning lately. If you want something, ask for it. If your logic is sound, chances are good you will get it.

These days, I'm submitting the manuscript of my new book to CEOs, company founders, and national experts on landlording and project management. And I have yet to be rejected. Every single person I've asked so far is happy (some even eager) to give a testimonial or review of the book.

Now, I fully expect this streak to end. Maybe even with the next person I ask, but here's one thing I'm sure of - chances are good as long as I put in simple terms why I've written the book and how it will help landlords turn their businesses around. As many of my testimonials are landlords themselves, it's really encouraging to me to see an early appetite for the material. Particularly by some of the giants in the industry.

Also, it's proof of something I learned in a writing class once: the only one who can sell my book is me. No one else can do it for me. This is even true of asking for testimonials and reviews.

So here's what I'm happy to announce:

Scheduled release for 1st run of 2,000 copies is August 31st, 2010.
The selling price will be $19.95 (plus $3 shipping and handling for delivery).
It will only be available on my landing page being built at http://www.landlordmarketingsecrets.com/
With every purchase, I will be offering my FREE report "10 Tips Every Landlord Must Know."

That's the state of the union. It feels like I'm at the 24th mile marker of a marathon run; it's exciting to see this journey transition to a whole new phase.

A phase where I prove again that I can create the best multi-channel marketing strategy that ever existed. I've done it dozens of time for clients, but this time it's personal. My own money's on the line. And there's hardly anything more motivating than that!