Competition in the residential rental market can be fierce. Renters have easy access to a vast amount of information that helps them know if they’re getting a good deal. They are demanding more for their money, and they’re willing to move to get it.
The pandemic has turned some markets on their heads. For a long period, urban renewal was a hot topic. Professionals were moving back into the cities to have easy access to the perks of being close to work, restaurants, culture, and a thriving social scene. The pandemic has changed all that: telecommuting and quarantined, renters are leaving the cities for the suburbs where rent is cheaper.
This is on top of the California’s worrying domestic immigration trend, which is seeing hundreds of thousands of people leaving the state each year.
By bringing together financial sophistication, complete in-house renovation capabilities, and astute property management talent, Pan American Properties strives to keep our clients’ properties competitive even in a tough marketplace.
How do properties attract and retain tenants?
For residential properties, competitiveness has two distinct components: attracting new residents, and retaining existing ones.
The people who already are part of a community are its most important assets: they not only contribute to its financial health, they also give it life and continuity. Most people prefer to stay where they are, but when something distinctly better is available close by, they might take the leap.
People looking for a new home have options. Rents are always a top concern, but within their comfortable price bracket the choice often comes down to small differences between one property and the next.
The competition challenge is especially acute for older properties. An apartment building that was built in the mid-1970s and was last updated in 1990 probably lacks the pop of a complex built in the last few years. Without a big advantage, like a prime location, properties that show their age may struggle to attract residents who are willing to pay a premium.
These are some ways a property can keep current residents and attract new ones:
- Keep common area décor fresh. A fresh coat of paint and a few simple upgrades to common area fixtures are some of the lowest-hanging fruits in the property management world. Tasteful choices can update the look and feel of a building without costing much.
- Timely unit renovations. When an older apartment unit is going to stand vacant for a period, consider taking advantage of the vacancy to make upgrades. A remodeled kitchen and bathroom supports a higher rental price, because the residents will love their home that much more.
- Exterior improvements. Just like single-family homes, apartment buildings are judged by their curb appeal. Many renters want to be proud of the building where they live. Fresh paint, new siding, or refreshed landscaping can make a huge difference for first impressions and a lasting feel of quality.
- Focus on energy efficiency. Efficiency upgrades improve residents’ quality of life and lower their utility bills. Energy efficient appliances can be a big selling point. New windows can transform the feel of an apartment that has skated along with worn-out hardware.
- Expanded amenities. Perks like well-stocked gyms and lavish swimming pools are among the key differentiators for new buildings. Adding a pool isn’t always practical, but a small gym space may be a few creative choices away from reality. Just adding two or three machines and a small wall-mounted TV can be enough to save residents the expense of a gym membership, giving them another reason to stay.
- Deliver great service. Renters pay for more than just a space. They pay for service. Apartment hunters recognize honesty and professionalism in a property manager and are more likely to choose a building run by people they trust. Prompt, professional, and courteous maintenance is essential for retention. In 2021, residents expect technological solutions to make their lives easier: online portals for maintenance requests and rental payments, community social media platforms, and so on can make a big difference.
Financial competitiveness for rental properties
Attracting and retaining great residents is the bedrock of every property’s financial performance. But the business of property management doesn’t stop at residents. Rental properties are also investments, and getting the best return from them requires careful consideration for how they are managed as assets.
At Pan American we take budgeting and forecasting for our clients’ properties very seriously. Simply throwing money at expensive renovations is not enough to guarantee a strong return. The renovations must be done within a tight budget established with careful consideration for how the renovations will position the property within its market.
A similar story can be told for virtually any financial decision made about a property. For example, some properties are offering incentives to attract new residents. Giving two rent-free months to a tenant who signs a two-year lease or a free year-long gym membership to every tenant can be a great move, but it should be done with a clear-eyed understanding of the expected rate of return.
How can Pan American serve you?
Pan American Properties offers complete property management services. We approach our work with deep financial sophistication, which we apply to every phase of our clients’ ownership journey—from due diligence and purchase through ownership and even sale. We have built an exceptional in-house team that can handle complex renovation and remodeling projects in a cost-effective manner. And we have the proven culture of service our residents deserve.
Learn how we can ensure that your property remains competitive for decades to come. Call us at (888) 754-9700 or send us an email at [email protected].