The financial crisis and real estate meltdown has hurt almost every sector of the real estate market, including apartment building owners. Vacancies in many apartment buildings have increased to between 30% and 40% in many areas of the country. Apartment building owners who just a few years ago had occupancy rates as high as 90% to 100% are now facing a situation where they are unable to pay their mortgage and can’t cover their operating expenses. This can create a domino effect which ends up with the property owner losing the apartment building to foreclosure.
Competition for renters is fierce in many areas and individual apartment building owners must act early and aggressively to market their buildings in order to improve occupancy and help their bottom line. Unfortunately, many smaller apartment building owners are facing competition from large multi-family complexes owned by large corporations. These larger buildings have slashed rents and are offering attractive rent concessions just to fill their empty units. The competition has deep pockets, so they can afford to spend the dollars that it takes to increase occupancy, while the typical individual multi-family owner must use creativity and marketing acumen to achieve the same results.
Here are some important ways to get those units filled:
- Research – The first step that an apartment building owner should take in order to increase his or her building occupancy is to carefully research the competition. Market rents are constantly changing and the apartment building owner should find out exactly what his or competitors are asking for similar units in the same area.
- Marketing – The apartment building owner must ask themselves honestly if they are fully utilizing all of the marketing tools at their disposal. Many multi-family owners who have been in the business a long time are not fully utilizing the power of the internet to reach prospective renters. Now, more than ever, these landlords need to get out and focus on both traditional and online marketing.
- Realtors – If you are seriously in trouble with your building occupancy it may be time to hire a Realtor to list your vacant units. A good Realtor is familiar with the marketplace and should have a successful marketing plan in place. Make sure you ask your Realtor for the exact steps they will take to market your vacant units. Don’t trust empty promises.
- Concessions – It may be painful but many apartment building investors may find it necessary to offer rent concessions to be competitive in the marketplace. Again, see what others are doing in your market and think about how you can match or beat them?