Apartment Companies Seek Creative Ways to Drive Revenue

In this tough rent growth environment, apartment operators are looking for new ways to drive more revenue.

Roman Speron, Chief Development Officer, Sentral; Jaja Jackson, SVP, Real Assets, ICONIQ; and Noah Himmel, Chief Operating Officer, Raven Capital Management; discussed ideas at the Apartment Innovation and Marketing Conference on May 6 in Huntington Beach, Calif.

For example, at X Denver, a downtown property, Himmel turned what was a regular happy hour into a language learning event.

He offered Spanish food, Spanish culture, and Spanish wine and taught residents how to speak Spanish.

“This is a good kind of event given the population makeup in our market,” he said.

The event was a hit, running for six months.

Don’t try to do every kind of event, though, he offered. Pick one or two events that you can do really well and do them really well.

Generate leads outside of Internet Listing Services (ILSs), he also said.

“Our prospects come from referrals based on our events by coming to our events they get the full experience of the community,” Himmel said. “We collect emails from them, and we follow up. You have to be persistent.

He said operators must always be thinking, “What can I offer my renters, so they don’t have to leave the community and spend money somewhere else? If you offer them activities and food such as at restaurants, they’ll think to themselves, ‘Wow. My community is saving me money.”

Jackson’s portfolio is leaning more toward short-term rentals, for which he said he gets 20% to 70% of a premium by charging daily rental rates at is properties that are managed by Sentral.

“If you’re going to make more revenue in a slow environment, you have to change the game somehow through differentiation,” Jackson said. “We don’t comp ourselves to our competitors.”

By offering short-term rentals, Jackson said he’s creating new demand and new rentals at his properties in South Florida, Nashville, and Chicago.

“You have to expand the circumference for the demand of your building,” said Jackson, who five years ago worked at Airbnb. “You have to bring in renters from other industries, other areas, make your homes available to people who are visiting such as attending industry conferences.”

The short-term length of stay varies by market – such as a 30-day minimum in some areas and by-the-day rates in others.

“At some point, you hit the top of the market in the rent that you can charge prospects will do the tour and look at the lease, but they won’t sign,” Jackson said. “You have to find a way to generate more rent income.”

He said to keep them in the community, operators have to listen to what their renters are saying.

“You don’t want a hole in the bucket, meaning losing them when their leases expire,” he said. “You need to focus on renewals. If they’ve told you that their packages are lost, or their trash pickup is bad, and the garage door doesn’t work, fix that low-hanging fruit right away or they’re going to go to the competition.

Another example, Jackson said, is that he learned his residents – paying for their prime apartment locations – wanted to be able to have their friends over. So, he expanded the common kitchen area and created that opportunity.x