Toni Blake posted some interesting thoughts on the NAA Blog recently – – – “Stop the Madness?”
Every day your residents drive by signs offering FREE RENT. In addition, there is a loud well-organized voice speaking through television, blogs, websites and print promoting free rent. We all know that this has had a negative long-term financial impact on our business. How can we respond effectively to this growing market trend?
Real estate research firm Reis, Inc. reports “the vacancy rate for U.S. apartments reached its highest level in more than 20 years in the second quarter and could soon exceed record highs if the recession persists.” To maintain occupancy, many major apartment firms have chosen to boost concessions while sacrificing rental income. (Reuters, “U.S. Apartment Vacancies Near Historic High” 07/08/09 – Full Story
Websites promoting free rent have even infiltrated mass media. On July 10, 2009 a featured story on CNN with Robin Meade recommended that renters get the best deals through RentOMeter.com. The home page says, “Paying too much on rent? Charging too little for rent? Enter info for your apartment below and find out!” The site also has built in bookmarks to share this information on the various social networks. Another new website is TwoMonthsRentFree.com. When you visit the site you find not only two months free, but up to three months free!
Am I the only one who wants to put her head out the window and scream, “Stop the Madness”? Sites like these depend heavily upon apartment listings for their success. However, if we choose to participate, aren’t we hurting our own industry? We should be learning and supporting new technologies, like social networking, that are giving us historic new marketing opportunities.
According to Jennifer Nevitt Casey of Bravo Strategic Marketing in my article “What to do instead of Free Rent”, (www.TotallyToni.com) “We are only hurting ourselves and believe it or not, we are still renting the same number of apartments based on available market share, just at much lower rents. The continued consequence of these irresponsible actions is an owner unable to make a mortgage payment by fourth quarter.”
Lowering rent does not create more customers in the marketplace; it simply reduces the revenue available to maintain the overall quality of life in our communities. Communities offering FREE rent specials frequently suffer an increase in skips, turnover and maintenance costs while also experiencing a decrease in the quality of the resident profile. What if instead of being the best deal – you simply decided to be the best place to live? We need to create marketing that communicates one message, “This is the best place to live!” Then, the reason for renting is the same reason for staying.