3 Ways to Build Community in Your Multifamily Real Estate Property

There’s one simple strategy that most people overlook in multi-family real estate investing.

It has nothing to do with renovations, budgeting, or underwriting. Yet, it increases profits, improves management efficiencies, and boosts cash flow. What is it?

Fostering community.

There are two different paths and philosophies when it comes to community.

The first approach says, “Our tenants are just paying a rent check. The community is just a place for them to live. They will come and they will go.”

The second approach says, “We have to truly foster community. We have to care and cultivate that sense of community, making sure that our tenants truly feel welcome — that they belong.”

While a property is just a rent check to some people, or a place to live, most people want to belong where they choose to live. So the value of your property will improve if you will actively develop that sense of community. That’s what we’ll be discussing right now — the three R’s.

3 Benefits of Developing a Sense of Community

1. Referrals

When you have happy tenants who feel valued, who like living where they live and who feel like it’s a safe place to live, they’re going to refer your property to their friends, family members, and associates — the people in their social circle.

A referral is the best, cheapest form of advertising. You don’t have to run flyers. You don’t have to run ads. You don’t have to run pay-per-click marketing campaigns. It’s simply word of mouth.

One resident simply talks to their friends about how great it is. And if those friends mention that they’re looking at moving, your current residents are the best sales force you can ever have. So you definitely want to incentivize them to refer your property to their family and friends.

But there’s no way a resident will recommend your property unless they enjoy it and think their friends, family members, and inner circle will enjoy it too.

So if you want to trim your advertising budget, strive to build community in your apartment complex. You will get better, higher-quality leads. Your sales and leasing staff will just be dealing with those hot leads instead of wasting time on weaker or lower-quality referral sources.

2. Renewals

Like referrals, renewals is another way to decrease ad spend. By increasing the number of people renewing their leases, that means less downtime and fewer units that we have to advertise as vacant. So our marketing budget can go down.

And since more residents are staying put, we don’t have to incur those turn costs whenever somebody new moves in, like fresh coats of paint or new flooring. This will greatly improve your finances and budgeting. So renewals is another advantage of fostering community. People will want to continue to stay in your apartment or multi-family property.

3. Reports

This is probably the most important one of all. If somebody really cares about where they’re living — if they’ve really bought into the community that you’ve built — and if something’s not going right, they’ll report it to you.

For example, if a tenant is causing issues for everybody else — perhaps they’re making other people feel unsafe — they will report it to you or your property management right away. That’s because they care so much about the community and the way they feel living at your property.

So if you have people reporting problems or issues and you’re able to nip them in the bud, that's going to improve the number of referrals you’ll be getting because everybody’s going to be happier. It's also going to improve the renewals you’ll be getting because people will actually want to stay. So having tenants that care so much about where they’re living that they will go out of their way to report things that aren’t right — that’s management gold.

So what are some specific ways that we can foster a sense of community and really make our tenants feel like they belong? Here are three ideas.

3 Ways You Can Foster a Sense of Community

1. Conduct Tenant Events

Events are a great way to foster a sense of community. The more people know each other, the more they’re going to feel like they belong. They’ll form relationships and friendships. Some people may start going for walks, maybe their kids will start playing together, or maybe they’ll go and play sports together.

The more that somebody is invested in a community, the more they’ll want to stay. And hosting events is a great way to get people to know each other. Here are some specific event ideas:

• Christmas Cookie Bake Sale. Have people get together in a community room with a kitchen and have everybody bake cookies and have that bake sale.
• Halloween Costume Contest. You can have trick-or-treating for the kids if that’s your tenant profile.
• Easter Egg Hunt. You can do this if you have lots of families.
• Exercise Class. Have a yoga instructor (or another fitness instructor) come in and run classes, whether that’s outside or indoors. If you have a young tenant demographic, take that into consideration with who you bring in.
• Skills Workshop. Run a pottery class or have some sort of arts instructor come in.

Having instructors come in benefits both sides. First, you get an activity your tenants can do. Second, since instructors usually come in for free because it’s good marketing for them, they’ll likely be able to pick up some sales down the road. So it’s a win-win for everybody.

Think about events that you can run on a monthly basis. Try to have an event every week if you have a larger community. And if your property is smaller, run an event every two weeks or every month. As people start to get to know each other and do things together while having a great time, that will start building the sense of community and belonging.

2. Offer Amenities That Fit Their Lifestyle

Let’s say you have a tennis court that’s been there for 20 years. But you have lots of kids who want a playground. Those tenants aren’t going to be having those enjoyable experiences with their kids because there’s nowhere for the kids to run around.

You might have one small patch of grass. The tenants won’t feel like it’s home because it doesn’t match what they’re expecting in terms of their lifestyle. But if you can transition that tennis court into a soccer field, a playground, or both, then you’ll have the tenants’ kids playing. They’ll be enjoying the outdoors. And everybody will be having a great time.

When the tenants see their kids having that good time and feeling like they belong, they’re going to invest more into the community and give you those three R’s:

1. If your tenant has kids and the kids are having a great time at your property because it’s structured and built to accommodate what they’re looking for in their lifestyle, they’ll refer your property to other friends who have kids.
2. They will renew at a higher rate because they’re happy that it fits in with their lifestyle.
3. They will report things that aren’t going right because they care. They want to stay because they are happy.

3. Talk to the Residents

Don’t laugh — this might seem like common sense but it’s really not. Speak frequently with your residents. Whether it’s in the morning as people go out for their walks or if they’re outside with their kids. Just go around and talk with them. Say hi and ask them how things are going. Ask them if there’s anything you can do for them or if there are any issues that have come up.

Most people are hesitant to bring up issues, unless they’ve really bought into the community. Perhaps they saw another resident lurking around going through garbage bins or something like that. Some people won’t report that. But if you’re able to go around and frequently speak with tenants and ask them if anything’s going on, you will be surprised at how often you will be told things that you had no idea were going on.

The best eyes and ears that you can have for your property are your tenants — your residents. So just speak with them on a regular basis — whether it’s with you or with your property manager. Try to go around on a regular basis. Make sure everybody knows that the door at the leasing office or the management office is always open.

What you can also do is drop off a letter with your phone number on it. Say, “Hey, if you have any issues, give me a call.” Speak with the tenants outside. You can even go knocking on doors maybe once every couple of months. Say, “Hey, are there any issues in the unit that we have to address?” Maybe a faucet has been leaking for months but they just haven’t gone around to reporting it. If you are paying for the water, that’s going to be costing you money. So you definitely want to hop on minor issues like that that some people just fail to report.

By having frequent communication with your tenants, they will feel that you care about them. And you do, because a happy tenant gives you the three R's. And that’s going to boost your profits. Again, it has nothing to do with traditional renovations, budgeting, or underwriting. This is all about customer service. Your residents are your customers. And happy customers generate referrals and improve your business.

The Bottom Line

These are just three ways (there are many more!) you can foster a sense of community in your property. But I just want to review the three R's: referrals, renewals, and reports. These are the benefits of having a strong sense of community. Running events is a great way to get residents talking with each other and building those friendships. Then make sure that your amenities and services fit the lifestyle that your tenant is expecting. And finally, talk with your residents. This is the cheapest thing that you can do. Yet, it often has the biggest impact.