It was such fun in St Louis speaking to the Mr Landlord national convention. Got a lot of great feedback and came away energized by the excitement so many landlords and real estate investors have to grow their business and increase their profits.
My talk was on 'The 5 Steps to Bigger Profits'.
Friday, June 3, 2011
Friday, April 22, 2011
Appearing on The Rebelbroker tomorrow morning!
Catch my interview on The Rebelbroker Saturday, 4/23 at 9:15am (PST).
http://www.blogtalkradio.com/rebelbroker/2011/04/23/real-estate-realities-with-the-rebelbroker
http://www.blogtalkradio.com/rebelbroker/2011/04/23/real-estate-realities-with-the-rebelbroker
Tuesday, April 19, 2011
4 Steps to Greater Rental Profits
Step 2: Become sticky
Banks use a term called “sticky services” to describe account features like direct-deposit, online bill pay and ATM usage. And they’ve found that customers who use these services ‘stick’ with the bank much longer than those who don’t. Hence the term ‘sticky services’.
Wouldn’t it be nice to make your properties more ‘sticky’ for the tenants who live in them? You can in some simple ways -
• Respond quickly to maintenance or repair needs.
• Setup electronic rent collection.
• Capture your tenants’ email address and send a monthly newsletter via email.
• Also get their cell phone number in your application.
Other great ways -
• Measure and practice customer satisfaction by sending out a survey with 5 or 6 questions like ‘how did you hear about us’, ‘why did you choose to rent with us’, ‘how satisfied are you with your rental experience’, ‘would you recommend us’, etc.
• Send birthday and holiday cards. One of my favorite things to give (and get) is lottery tickets. Just $10 or $20 in lottery tickets makes a fun little gift (with tongue firmly planted in cheek as you hope they don’t win big and move out!)
• Do something fun for their kids like host a party at Chuck E Cheese or rent one of those bouncy-houses for a picnic and games in the park. Appeal to the parental instincts of your tenants; it’s a fantastic way to set yourself apart from any other landlord they’ve ever had. Happy kids make for happy and grateful parents! And guess what happy and grateful parents do? They tend to pay on time.
Banks use a term called “sticky services” to describe account features like direct-deposit, online bill pay and ATM usage. And they’ve found that customers who use these services ‘stick’ with the bank much longer than those who don’t. Hence the term ‘sticky services’.
Wouldn’t it be nice to make your properties more ‘sticky’ for the tenants who live in them? You can in some simple ways -
• Respond quickly to maintenance or repair needs.
• Setup electronic rent collection.
• Capture your tenants’ email address and send a monthly newsletter via email.
• Also get their cell phone number in your application.
Other great ways -
• Measure and practice customer satisfaction by sending out a survey with 5 or 6 questions like ‘how did you hear about us’, ‘why did you choose to rent with us’, ‘how satisfied are you with your rental experience’, ‘would you recommend us’, etc.
• Send birthday and holiday cards. One of my favorite things to give (and get) is lottery tickets. Just $10 or $20 in lottery tickets makes a fun little gift (with tongue firmly planted in cheek as you hope they don’t win big and move out!)
• Do something fun for their kids like host a party at Chuck E Cheese or rent one of those bouncy-houses for a picnic and games in the park. Appeal to the parental instincts of your tenants; it’s a fantastic way to set yourself apart from any other landlord they’ve ever had. Happy kids make for happy and grateful parents! And guess what happy and grateful parents do? They tend to pay on time.
Tuesday, March 29, 2011
4 Steps to Greater Rental Profits
Want to know the 4 steps to increase your rental profits? It's not just about raising the rent. It is about thinking like a business owner, protecting yourself and meeting customer needs. But where to start?
Step 1: Buckle Up
Tighten your screening process. Always do a credit check and background check. Most landlords know this but sometimes we let some tenants slip through the cracks. The challenge is more inside than outside. It’s a mindset, a way of thinking. It’s good to want to trust people, but every landlord is a business owner with assets to protect and customers to serve. So, why would we fail to screen tenants? Maybe to get our places rented faster. But experience shows time and again that’s both short-sighted and dangerous. Think of credit and background checks as an “insurance policy” to protect against much greater costs down the road. Besides, landlords should be charging an application fee to cover the costs of screening. If you’re not charging for this, ask yourself ‘why not?’ Is it to get the place rented faster? Again, short-sighted and dangerous. If your applicants don’t want to pay $20 or $30 for screening, then they’ve just weeded themselves out and saved you a lot of money and hassle down the road!
You want to attract the best tenants who are more likely to pay on time and never go to court or have to be evicted. But who are these ‘best’ tenants? Well, you know them instinctively. They’re the ones who pay their application fees for screening. Who take decent care of your property. Who have stable employment and transportation. Who have many options available for places to live. That’s who you want to aim for. So, buckle up. Tighten down your screening process and you’ll start reaping big rewards from your rentals.
More in future posts on what the next 3 steps are . . .
Step 1: Buckle Up
Tighten your screening process. Always do a credit check and background check. Most landlords know this but sometimes we let some tenants slip through the cracks. The challenge is more inside than outside. It’s a mindset, a way of thinking. It’s good to want to trust people, but every landlord is a business owner with assets to protect and customers to serve. So, why would we fail to screen tenants? Maybe to get our places rented faster. But experience shows time and again that’s both short-sighted and dangerous. Think of credit and background checks as an “insurance policy” to protect against much greater costs down the road. Besides, landlords should be charging an application fee to cover the costs of screening. If you’re not charging for this, ask yourself ‘why not?’ Is it to get the place rented faster? Again, short-sighted and dangerous. If your applicants don’t want to pay $20 or $30 for screening, then they’ve just weeded themselves out and saved you a lot of money and hassle down the road!
You want to attract the best tenants who are more likely to pay on time and never go to court or have to be evicted. But who are these ‘best’ tenants? Well, you know them instinctively. They’re the ones who pay their application fees for screening. Who take decent care of your property. Who have stable employment and transportation. Who have many options available for places to live. That’s who you want to aim for. So, buckle up. Tighten down your screening process and you’ll start reaping big rewards from your rentals.
More in future posts on what the next 3 steps are . . .
Tuesday, March 15, 2011
Catch my interview on Logical Soul today, 3/15.
http://www.blogtalkradio.com/logicalsoul/2011/03/15/landlord-marketing-secrets
I'm talking with Dr. Michael Craig about how smart marketing tips can increase rental profits for landlords and property managers.
I'm talking with Dr. Michael Craig about how smart marketing tips can increase rental profits for landlords and property managers.
Wednesday, February 9, 2011
When What Used to Work Doesn't Anymore
Have you have ever had too many qualified applicants for your rental properties? So many you had to turn them away and even stop advertising? I mean what a happy problem, right? A landlord’s dream.
If this has ever happened to you, you probably wish for the good ol’ days to return. More often we have units or homes available and few good applicants in sight. So our properties sit empty. Week after week. Month after month.
STEP 1 – Put a “For Rent” sign on the building
STEP 2 – Run an ad in the newspaper
STEP 3 – Another ad in the local apartment guide
STEP 4 – Offer 1st Month FREE
Is this your marketing plan? Wonder why what used to work doesn’t anymore? Why does it take longer to fill vacancies? One word: change. What do the economy, the weather, your competitors and consumer behavior all have in common? Constant change. It’s a situation hardly unique to landlords and property managers. Think of a different industry. Think of Ford Motor Company.
Ford saw huge sales declines and billion-dollar losses the past few years. At the brink of bankruptcy in 2008, what they had been doing clearly wasn’t working anymore. Why? Consumer demand shifted away from the models that Ford produced. The company had largely stopped meeting the needs of its customers. When a business loses its way and sales falter, it can often be traced back to losing sight of the customer. Ford’s new CEO Alan Mulally responded by cutting unprofitable models from their lineup and redesigning some of their most popular models. And Ford is back in a big way with record sales growth and increasing market share.
But what about a recession like we’re climbing out of now? There too. Change demands that we respond to consumer needs differently. Abandon what doesn’t work. Explore and adapt new strategies to restore what’s been lost.
So what does this mean for us landlords? 3 things.
1. Don’t be surprised. In fact, anticipate it. Relationships evolve, including those with your tenants. Needs change. Remember the Boy Scout motto: be prepared.
2. Communicate with your tenants. Find out where they are spending their time. Maybe you know where they work. What about where they like to hang out or relax? You need to be there, reaching others with a strong, relevant offer. People are spending more and more time online. Think how you can turn that into an opportunity.
• Try advertising your properties on Craigslist.
•Try a Google Adwords campaign.
•Put together some helpful tips or a checklist for prospective tenants to use in their apartment search.
• Keep an eye out for garage sales. They can sometimes be an early indicator that the residents are thinking of moving. What if you could be first-to-market and schedule a tour with them for one of your properties?
• Put on an “Open House” to showcase your available property and invite the neighbors and your other tenants over. Word-of-mouth can build from there.
Provide value. Get your name out into where your market is. Don’t think of it as “branding”. Think of it as solving problems. Meeting needs. That’s how you start to make a connection and attract new tenants.
3. Discover your Unique Selling Proposition. What sets you apart from the many other apartments, houses and condos in your market? Armed with a host of resources available online, today’s renter is in control like never before. Play to that. Put yourself in their shoes. Think back to when you were younger, before kids, looking after work and on weekends to rent your first, or second, or third place. Have it in your mind? THAT is your customer. Now go get ‘em.
If this has ever happened to you, you probably wish for the good ol’ days to return. More often we have units or homes available and few good applicants in sight. So our properties sit empty. Week after week. Month after month.
STEP 1 – Put a “For Rent” sign on the building
STEP 2 – Run an ad in the newspaper
STEP 3 – Another ad in the local apartment guide
STEP 4 – Offer 1st Month FREE
Is this your marketing plan? Wonder why what used to work doesn’t anymore? Why does it take longer to fill vacancies? One word: change. What do the economy, the weather, your competitors and consumer behavior all have in common? Constant change. It’s a situation hardly unique to landlords and property managers. Think of a different industry. Think of Ford Motor Company.
Ford saw huge sales declines and billion-dollar losses the past few years. At the brink of bankruptcy in 2008, what they had been doing clearly wasn’t working anymore. Why? Consumer demand shifted away from the models that Ford produced. The company had largely stopped meeting the needs of its customers. When a business loses its way and sales falter, it can often be traced back to losing sight of the customer. Ford’s new CEO Alan Mulally responded by cutting unprofitable models from their lineup and redesigning some of their most popular models. And Ford is back in a big way with record sales growth and increasing market share.
But what about a recession like we’re climbing out of now? There too. Change demands that we respond to consumer needs differently. Abandon what doesn’t work. Explore and adapt new strategies to restore what’s been lost.
So what does this mean for us landlords? 3 things.
1. Don’t be surprised. In fact, anticipate it. Relationships evolve, including those with your tenants. Needs change. Remember the Boy Scout motto: be prepared.
2. Communicate with your tenants. Find out where they are spending their time. Maybe you know where they work. What about where they like to hang out or relax? You need to be there, reaching others with a strong, relevant offer. People are spending more and more time online. Think how you can turn that into an opportunity.
• Try advertising your properties on Craigslist.
•Try a Google Adwords campaign.
•Put together some helpful tips or a checklist for prospective tenants to use in their apartment search.
• Keep an eye out for garage sales. They can sometimes be an early indicator that the residents are thinking of moving. What if you could be first-to-market and schedule a tour with them for one of your properties?
• Put on an “Open House” to showcase your available property and invite the neighbors and your other tenants over. Word-of-mouth can build from there.
Provide value. Get your name out into where your market is. Don’t think of it as “branding”. Think of it as solving problems. Meeting needs. That’s how you start to make a connection and attract new tenants.
3. Discover your Unique Selling Proposition. What sets you apart from the many other apartments, houses and condos in your market? Armed with a host of resources available online, today’s renter is in control like never before. Play to that. Put yourself in their shoes. Think back to when you were younger, before kids, looking after work and on weekends to rent your first, or second, or third place. Have it in your mind? THAT is your customer. Now go get ‘em.
Friday, December 3, 2010
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.
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.
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