How to Combat Slowing Rental Rates in 2019
It wasn’t so long ago that getting into the property management industry felt a lot like printing money. New builds were popping up every year, and renters just kept coming to fill them. The numbers continued to show that millennials would be renting for years instead of buying homes, and people 50+ seemed to be going back to the rental life. People didn’t need innovative apartment marketing ideas because the units sold themselves.
As this Wall Street Journal article points out, however, that boom is over. There’s been increased construction of communities over the past five years, and at the same time, a slowing of rental rates. Since the financial crisis of 2008, there’s been a mad rush to construct new properties. Now, we’re dealing with the effects.
Back when the property boom was helping most properties perform well, a lot of companies could just post their property’s information on Craigslist and fill units. It was that easy. Some luxurious, desirable community could reach the people they need to reach by doing nothing more than organic (and free) social media posts. New properties were popping up left and right, and people bought them for the simple reason that they needed a place to live.
10 years later, we have an abundance of properties and more than a few empty rooms. Property management companies are being forced to do more with less. They have less occupancy, which means they have fewer dollars to be able to spend on their apartment complex marketing ideas.
Some people have responded to the low occupancy rates by cutting back on marketing. Savvy property management professionals are stretching their dollars to do more. Those few property managers who are leading the industry forward, however, are actually increasing their marketing spend. Instead of cutting back on marketing, property management companies should be focused solely on increasing the amount of traffic they’re getting into the leasing office. That occupancy gap needs to be offset somehow, and it’s easier than ever to attribute leads to increased marketing spend.
Great marketing ideas for apartments can get the word out about available units and special offers, but that marketing needs to be widespread and varied. Meaning, marketing dollars to be spread across multiple media channels in order to increase the number of leads. The ability to attribute a lead or conversion to a specific marketing campaign — or even a specific ad — will be key. If you’re not able to target and track your audience, your marketing dollars aren’t doing you much good.
With the increased supply that we have in 2018, property management companies need to use more sophisticated methods to target potential renters. Apartment finders don’t work anymore. Apartments.com is only used to read reviews. The old methods don’t work because they don’t target specific audience demographics.
Owners of new properties are actually lucky, because they don’t have to spend as much on marketing as they would if they owned older properties. Owners of older properties should be investing in more marketing initiatives than owners of new properties. The older your property, the more marketing it needs. It’s not just about marketing spend though; strategy is equally important. If you have a property that’s 5-10 years old, your strategy needs to be vastly different than it would be if your property was sparkling new.
Threshold/Carve can help you with that strategy, and we can help you unearth cost-effective apartment marketing ideas. Feel free to reach out to a THC team member for advice.