Apartment lease-ups are a crucial process for investors aiming to maximize returns in the competitive real estate market. In this article, we’ll delve into the world of lease-ups, exploring what they entail, their purpose, and the components of a successful lease-up.
What is an Apartment Lease-Up?
At its core, an apartment lease-up refers to the process of marketing and leasing newly constructed or renovated apartment homes. It serves as the critical phase when a property transitions from being a construction project to a thriving, income-generating asset. The primary goal of a lease-up is to achieve maximum occupancy, stabilize cash flow, and position the property for long-term success.
Apartment lease-ups mark a pivotal point in a property’s life cycle. They involve strategic planning, meticulous execution, and effective marketing to attract high-quality applicants and establish a solid foundation for financial viability. Lease-ups are particularly crucial for new apartment buildings aiming to build a resident base from scratch or for existing properties undergoing substantial renovations or rebranding.
There are four key components for a successful lease-up of a new or newly renovated property:
- Marketing and Advertising
- Pricing and Incentives
- Lead Generation and Applicant Screening
- Closing
Continue reading for an in-depth look at each of these components so your team can achieve leasing success.
Key Components of a Successful Lease-Up
Marketing and Advertising
Effective marketing strategies are at the core of a successful lease-up. This includes creating a compelling brand identity, designing eye-catching marketing materials, and utilizing various channels to reach potential residents. To develop an omnichannel approach, your team should consider developing social media profiles & a content calendar, Google Business Profile, ILS platforms, and engaging in person in your local community.
Pricing and Incentives
Determining the optimal rental rates is crucial during the lease-up phase. Conducting thorough market research to understand local rental trends and competition is essential for setting competitive rates. One tried and true way to gather market research is to physically shop your competitors in-person. This can present challenges if your competitors know your leasing staff personally. Hiring an outside source to shop your competitors is the best way to gather the needed insights to make strategic pricing decisions.
In addition to your market research, providing attractive lease incentives, such as move-in specials, referral programs, or flexible lease terms, can help entice prospective residents and expedite lease signings. Be sure to also note the incentives your competitors are running when conducting market research.
Lead Generation and Resident Screening
Generating a robust pipeline of prospective residents is vital for a successful lease-up. Employing various lead generation techniques, such as property tours, online inquiries, and referrals, can help your team reach out to the right people at the right time. To accommodate the influx of traffic to your property, consider an accelerated leasing program, such as Sales, Inc. These programs can provide additional support to your leasing team that will focus solely on leasing, accelerating your pipeline, and increasing your applications taken.
It’s equally important to implement a thorough resident screening process to ensure that qualified and reliable individuals are chosen as residents. Depending on the type of property, your screening process may include background checks, credit checks, and income requirements. Consider developing a policy for special cases, such as those affected by the lockdowns in 2020 that may have taken advantage of the CARES Act.
Lease Closing
Closing a lease involves working closely with applicants to address their needs, answer questions, collect paperwork, and finalize lease agreements. Building strong relationships with applicants during this phase sets a positive tone for their tenancy and fosters a sense of community to which they are entering. Consider a move-in gift, such as a welcome basket or branded promotional items, to make them feel appreciated and at home in their new home.
The Sales, Inc. Accelerated Leasing Program for lease-ups puts a highly trained leasing professional in your leasing office to focus solely on getting your property leased with qualified applicants as soon as possible. Learn more about our Accelerated Leasing Program for new lease-ups.
