The Importance of Rent Price When Leasing Your Apartments. 4 Things a Leasing Agent Must Accomplish With a Prospective Renter.
As the top provider of qualified traffic to apartment communities in the country, I am often asked by our apartment SEO clients for tips on how they can better convert the calls and visitors we send to the leasing office in to signed leases bringing the community to 100% occupancy. With almost total certainty, the discussions I have with apartment marketers and leasing agents will include questions about prices and rents. Most of the questions sound something like this; “I am worried that rents are too high. What if my rent is too high?”
Although setting rents is a very important component of leasing, my experience in helping apartment communities lease units for ten years has taught me that the cost of the rent is often misinterpreted and blamed as being the reason a leasing agent was unable to close a prospect on an apartment.
In this article, I am going to talk briefly on the importance of price and rents and the fact that price will not get you a signed lease unless the leasing agent can accomplish four things with the prospect.
Price is always a very sensitive issue for renters. It doesn’t matter if the community is affordable or luxury the cost of the rent is going to come up before a lease can be signed. Leasing agents are constantly being hammered with the notion that renters don’t have the money to sign a lease and that lowering rents would be a great solution to their occupancy issues. The reality is, and this is very important for leasing agents to understand, it is very easy for a community to get confused when it comes to the importance of rent.
As money gets tights tighter renters will become more concerned about which of the following two things? Price or value? The first response I get from most leasing agents is price or rents. What is often confusing to understand is that price and value have nothing to do with one another. The cost of the rent and the value a prospective renter places on an apartment they are looking at are not the same thing. Rent and value of an apartment are measurements against one another but they are completely different subjects as far as signing a lease is concerned.
An often made incorrect response to a property not signing leasing is to lower rents or give move-in specials. A lower rent will not necessarily lease units. I know we all have had the experience where we match or beat the rent of a competing property and we still don’t sign a lease. So now you are in a position of dropping your rents and you still are not leasing units, not a good position to be in. A lower rent alone will not get someone to lease an apartment from you is they are not fully sold on the unit and the community. A lower volume of leases + lower rents = a disaster waiting to happen for any community.
Below are 4 things that the leasing agent must accomplish with a prospect before they even begin to consider is my asking rent too high.
Number one: The leasing agent needs to do a better job of identifying what the renter is trying to accomplish by moving to that community. Do they want a bigger unit? A home closer to work? A good school district? Do they want to meet people? Live in a safer place? What is they are looking for? “I want to live closer to my new job.” Good, where do you work? Lets pull up some possible routes to the office from your new home here. Wow, only 5 minutes to work! How long is commute now? 40 minutes? Wow, you just saved yourself an hour and ten minutes everyday, almost six hours a week and nearly 24 hours a month! What about the money saved on gas? This is exciting, I am glad we are so close to your new job. Now getting your asking price for rent is not a problem at all, you just helped them see the value of being 5 minutes away from work. No need to lower rent or offer a move-in special. The fact that you identified what they are trying to accomplish and matched the community to their goal is special beyond price.
Number two: The leasing agent needs to demonstrate why the available unit is worth more than the price of the rent. You have to show the prospect why your apartment is worth more than the rent. It doesn’t matter if the rent is $500 a month or $5000, no body will sign a lease unless they feel the value is more than the monthly asking price. Not the same value, MORE value. You need to take the time to explain the value of the unit and community to the prospective renter that shows them multiples of return in perceived value than what they will be paying you in rent. When value exceeds price it ensures that the renter is not just making the right decision but a great decision signing a lease with you.
Number Three: Demonstrate how your unit solves their problem. Much like the example given in number one, the agent just cant stop at identify what the renter is trying to accomplish they must demonstrate how their community and/or units soles the renters problem. You said you wanted a safer community for your kids. Let me show you how our front gate works. Notice how set back the property is from busy streets? We have a security patrol 24 hours a day. I actually have a 3rd floor unit that is very safe and secure available today. You need to explain in detail why the prospect will love your community and how it will solve their problem. People rent an apartment for two reasons, 1. To solve a problem and 2. To feel good. Show them both and cost of rent will matter a lot less.
Number Four: Be sure that the unit you are showing your prospect is within their financial means. If someone does not have $5000 a month to spend on rent you can build value until the cows come home but if they don’t have the money, they don’t have the money. Only having traffic coming to the property from renters that cant afford to live there is the fastest way for you to be forced to reduce your rents. If your leasing office is not getting a high volume of calls from prospects that have the financial means to pay your current rents or higher, call my office at 888-683-5885. There are a number of things that we can do to help you have a strong a steady flow of potential renters coming into the leasing office that have the money to spend.