Thinking outside the apartment box

Our industry has changed considerably over the years.  From doing our accounting on ledger cards to lease optimizer programs, nothing is for sure but our industry is changing.  Financial success means thinking outside the box and if you are afraid to look at operations beyond the norm and how we have done them, you will probably get left behind. 

Owners and managers struggle to find ways of increasing revenue and new ways of generating income streams.  The obvious way to improve income is increasing resident retention, which is the highest controllable expense we oversee.  With the average cost of turnover including vacancy loss being well over $3,000 in most markets, keeping ten more residents on a 200 unit community (5%) means $30,000 of improvement to the bottom line.  Other critical points include managing lease expiration's and of course providing excellent customer service (also tied to resident retention). A property I recently took over had 68 expiration's in one month.  Can you say, "who in their right mind would allow this to happen?"  Apparently someone that did not understand the concept of expiration management. 

So where do we go beyond the obvious and what "outside the box" ideas should be looked at?  First, a great leader and manager never is afraid to test the waters and take risks.  We have all heard people say, "If it's not broke, don't fix it," or "We've always done it that way so why change."  Whether it is raising application or administration fees, pet fees versus deposits, or charging for premium parking spaces, you never know if it will work if you don't try it.  Companies are looking at taking prime parking spots in front of buildings and charging "convenience" fees for these spaces, generating thousands of dollars in additional income.  One of the new trends is actually setting up mini-markets in apartment offices where residents can purchase toilet paper, paper towels, toothpaste, dish washing and clothes detergent, and other items they run out of and are willing to pay a little extra for the convenience of walking out their front door and purchasing on the site.  With gas at $4.00 a gallon, this type of out of the box thinking is generating additional revenue.  Putting motion detectors on lighting at tennis courts at a property I oversaw paid for itself in 10 months. 

Expenses are rising related to taxes, utilities, payroll, and other areas.  It is up to us to find ways to offset those expenses and improve the bottom line.  Creativity is the key to success, and owners have expectations on their return on investment.  For years apartments have been called, "the vanilla box."  How about putting a little topping on that vanilla, and take a risk.  We would never have reached the moon or developed a new property in a new market without taking risks.  Think about it and you may come up with the next idea in raising revenue.