By Christina Simms, Contribution by Rick Burkhalter
A year of economic challenges and shifts in fiscal dynamics is sure to have lasting repercussions on multifamily properties.
It is an anniversary we do not necessarily want to celebrate. The COVID pandemic has lasted nearly a year in the U.S. but eventually it will ease and thankfully so. However, there is and will continue to be fallout. Multifamily property owners will now be faced with more challenges as the pandemic is mitigated. Full occupancy necessities, accumulated rent debt , operational challenges and staffing requirements are on the horizon. Is your property prepared?
Accumulated Rent Debt
One such consequence resides in accumulated rent debt, which is predicted to be over $70 billion and growing industry wide. Some of your residents have been able to find new jobs or were able to pivot, but still face months of back rent and consumer debt. Take into consideration that and a stagnating economy particularly among the working class and gig economy sector. These individuals face a challenging future – all of which creates a potential challenge for multifamily property owners.
Full Occupancy May be Necessary for Your Multi-Family Property
Another consideration is the delay in the expiration of the eviction moratorium. As of now it is extended thorough the end of the first quarter, but it may extend beyond that. This makes full occupancy all that more important. In the past, a 90-95% occupancy rate may have been suitable but now you may need full occupancy to balance the gap in incoming rent.
Operational Challenges After The Moratorium
Then there is question of how to tackle the operational challenges once the moratorium is lifted. Property managers will be faced with the reality that they will not be able to handle the multiple priorities that lie ahead. Many do not have the staff and have been struggling to hire. We estimate that the lifting of the CDC moratorium will create even higher vacancy rates among an already shrinking resident base. Management will not only be tasked with processing evictions or fulfilling requirements to service and file new documentation for current residents, but they will also need to concentrate on traditional operational efforts. This leaves little to no time for any strategy focused on one’s vacancy rate.
The truth is you do not have time to wait until the end of the moratorium. Leasing is still taking place and residents are considering their next move. Because of this pandemic your staff have been put in unique positions and they may be showing signs of wearing down. Asking them to double their efforts may be a big ask after almost a year of exceptional situations encountered by your staff.
Five Things To Consider Now
As a property owner, it is time to start planning now on how to manage the operational juggle before you and not lose sight of opportunities for potential revenue. Here are some things to consider:
- Audit your current capabilities. Is your team honestly in a position to handle outgoing residents while also focusing their efforts on contacting prospective residents? Put a plan in place.
- Review your marketing mix, especially in the digital sense. Your website should be adjusted to engage in multiple ways of communication and interaction. In addition to your website, be sure your listings, advertisements, social media, email marketing and SEO strategy are current, consistent, and adjusted to your reality now.
- Do not ignore good old-fashioned marketing and networking. It is important to pay attention to many marketing and PR strategies like grassroots and community engagement. Find creative and safe ways to engage during the pandemic while creating a fluid strategy for the future. You are in the business of building a community, grow it!
- Review your sales cadence. “First to contact, first to contract” so a sense of urgency is key. Prospective renters now only look at half as many properties than in the past when deciding on where to live. It takes on average of 8 attempts to reach a prospective client, so a follow up plan is important. Ask the right questions, listen, and offer solutions. Plan on how to stay in front of renters who decide to live elsewhere.
- Hire help – Start thinking about who you need to outsource to get the job done. Many of our clients reference how hard it is to recruit and hire real talent – do not ignore the possibility of bringing in experts on a contract basis. Many are using those avenues to fill the bigger need they see coming and has already arrived.
Considering these tactics will help you stay in front of a potential threat to your bottom line and hopefully keep turnover and vacancy rates lower.
Christina Simms is the Marketing Manager and Rick Burkhalter is the General Manager of Sales Inc. a leading apartment leasing agency, helping multi-family property owners achieve their occupancy goals through our proven accelerated leasing, marketing, and training strategies.