Managing a three-day turnover on a unit still holds strong as an industry-wide standard. But when it comes to ensuring quick turnovers across an entire community, the human element has to be every bit as diligent and precise as the revenue management software and other technology used during the process.
Some of the most successful ways to pick up every dollar off the table are using old-school methods to manage expirations, and essentially, good planning, in conjunction with property management and other types of software.
“Lease expiration management is the clear strategy to make sure there’s minimal downtime between each unit so you don’t have a bulk of apartments at the same time to turnover,” Peggy Daly, senior vice president at Dallas-based Behringer Harvard said at this year’s Mutlifamily Executive Conference. “[But] you can’t just turn it on. It still involves you managing the process.”
All panelists agreed that using boards and charts in addition to electronic methods can be helpful. The easy visual can allow leasing agents to glance and recognize quickly what number of leases they should be doing, and what their capture rate on renewals are.
Revenue management software has a tendency to keep things in check with what’s going in the market and can effectively knock you out of the cycle if you take a myopic view.
“Remember that there still should be a human component to it,” said Christopher Hilbert, president of real estate operations, Irvine, Calif.-based Steadfast Companies. “Ensure that we don’t have unintended consequences by the decisions we make.”
Walk-Throughs Are Key
That human component extends to the intricate planning of the individual units before beginning turnover work, starting with a walk-through of the unit once a notice to vacate exists. Knowing what you’re walking into before you hand over the keys to the maintenance or renovation staff is important will give you a handle on the scope, cost, and critically, the timing of the make-ready process.
"If you do your pre-inspections before they move out, you can figure out what you need,” said Greg Lozinak, COO at Chicago-based Waterton Residential. “Service team can be out renovating [multiple] units without going back to the shop. It’s a big time saver.”
Managers should be checking in on the state of an apartment throughout the year, prior to the notice. Billing tenants for damages, if any, during the duration of the lease will cut down on future damages and turnover time. This is especially the case with student housing, Daly added, in which damage isn't just a vague possibility but something to be expected.
“When you endure a turn, minor issues will snag up the system,” Daly said. “Preventative maintenance is key. Don’t have units in terrible condition when they move out.”
Incentivize Staff for Swiftness
This system of preventative maintenance is flanked by a well-trained staff, above all. From leasing agents to maintenance teams, having everyone knowledgeable about the goal can help ease turnover work.
One very effective way of doing that is by offering incentives based on the timing of make-ready days.
“Leasing agents have bonuses or they share the renewal bonus,” said Kimberlee Schreiber, vice president at Marlton, N.J.-based Interstate Realty Management. “We incentivize the maintenance staff and there’s a goal for number of make-ready days. If they beat that, there are earnings potential.”
When everyone’s bonus is tied together, it’s understood that all employees must work together, thus having the reward put in place. “We’ve found a lot of good effect by offering this incentive,” she added. “You’re not losing money when compared to vacancy.”
Some other tips include having leases expire on a Monday, so managers can pick up a few extra days of revenue. The reason Monday is so appealing is that most tenants will move out over the weekend or even a bit before, leaving time to schedule maintenance over the weekend while they're still paying rent for those extra days.
And for portfolios that come in at special times of the year, like military and student housing sectors, it’s difficult to get all apartments ready in time. Taking ideas from the hotel sector, you can have tenants who are waiting to move into their unit placed in a furnished unit until further notice.
“You pay rent on that unit, and have the belongings delivered later,” Schreiber said.
Linsey Isaacs is an assistant editor with Multifamily Executive magazine. Follow her on twitter @LinseyI