Posts tagged apartment leasing
Apartment Leasing: Lease To Anyone!
Mar 16th
It’s probably happened many times – someone comes into your leasing office and you think, “No one could lease to that person!” Well, in today’s competitive apartment leasing environment, you have to be able to lease to anyone. And, believe it or not, it can be done. All it takes is the right information and some resourceful techniques to turn a “no way” into an “okay!”
Thanks to Wendy Muse, Vice President of Education at Tarragon Management, Inc., and Lisa Trosien, President of ApartmentExpert.com, The “How to Lease to Anyone!” workshop at the Multifamily Brainstorming Sessions a few years ago where they shared, some of the most applicable tricks-of-trade when it comes to dealing with all types of customers. Here are just a few of the most familiar personalities they discussed and their original ideas for transforming these leasing challenges into signed leases.
Recognizing Different Types Of Customers
In A Hurry
What do you do when a person doesn’t have an appointment and just wants to run through some models quickly? Or what if he or she doesn’t have time to fill out a guest card? It’s time to think on your feet. Complete the guest card as you’re walking through the models – this saves time and allows you to get the information you need. You also can offer to e-mail a brochure to the visitor and suggest that he or she makes an appointment for a later time. Of course, the key here is to tell the person that you know and understand how valuable his or her time is. Make the process a convenient and enjoyable one, and you’ll have a better shot at closing the deal.
Personality Conflict
Sometimes you may just not click with someone. Your personalities don’t mesh, and it doesn’t look like you’ll be able to work together. In this situation, if you can make a graceful handoff to one of your colleagues with a “Why don’t I have Susie show you our model” or “John will be happy to take you through the paperwork,” go ahead and do it. If this isn’t possible, take a moment to read the person’s body language (such as crossing his arms, leaning forward, or standing at a distance) and see if you can mirror it. This is a diplomatic sign of respect that might help you ease the tension and move away from potential conflict. Of course, you can always grin and bear it. Put on a big smile and do your very best to serve this customer. That’s your job, and you just need to give it your best.
Disabled
When someone in a wheelchair visits your property and your models are on the second floor of a walk-up building, don’t immediately think that you won’t be able to lease to this individual. According to Muse and Trosien, it’s a good idea to have virtual tours available, either via a video in the office or on the Internet. Another option is to show the person a market-ready apartment on the first floor of the building. Yet, the most important approach is to discuss the person’s needs in detail, never assuming what the person can or cannot handle. From your prospective customer’s input, you will be able to tailor a presentation to his or her needs.
Blind Or Hearing Impaired
If a blind person visits your property, it is important to introduce yourself immediately. This person wants to know who he or she is speaking to, and you don’t have time to play guessing games. Oftentimes, someone who is blind will have a lead dog or a companion. In these cases, refrain from touching the lead dog, and be sure to talk directly to your future renter – not through the companion. Furthermore, never touch a blind person without speaking first; you don’t want to startle him or her. Then, as you begin your tour, use the “sighted guide technique,” walking beside the person with your hand on his or her arm and giving explicit directions as you move through the apartment.
For the hearing impaired, the rules of engagement are clear-cut. First and foremost, do not turn away from the person you are speaking to; that individual needs to read your lips. Therefore, also be sure that you don’t cover your mouth while you’re speaking. Keep the volume of your voice at a normal level – you don’t have to shout for a hearing impaired person to understand you. Finally, don’t over-enunciate, and don’t hesitate to rephrase what you or the potential customer has said to make sure that you’re on the same page.
Looking Way Into The Future
If you think that talking to or showing models to someone who doesn’t plan to sign a contract for at least six months is a waste of time, think again. These people are potential customers, and the best way to deal with them is to treat them like every other client. To start, don’t hesitate to show them a model. If they show interest, this is a great opportunity to put them on a waiting list – a skillful way to make sure that there is a unit waiting for them when they’re ready to make a move. You also should put them on your e-mail or newsletter list, as this is a quick and easy way to stay in touch over time. In addition, if you have planned a resident function for the near future, invite these potential residents to join in the festivities. This kind of personal service will keep your property in the forefront of their minds.
Pet Owners
People’s pets are often like their children. Most people will not move without their pets, so if your property accepts them, you’ve already earned points with pet owners. You can net even more points by catering to pets, keeping pet items in the model and making sure that the property is a welcoming place for someone’s precious pooch or frisky feline. If you don’t take pets, you might want to consider changing your position; a “no pets” policy can eliminate 60 percent of your prospect base. However, if you are determined to operate a pet-free complex, be sure to talk to prospective renters about the consequences associated with a violation of your policy. You don’t want to anger a renter by delivering an unexpected penalty.
From Out Of State
Moving is a daunting experience, and moving from out of state is even worse. These renters face a higher level of anxiety than most customers. By letting them know that you are a true professional and that you have their best interests at heart, you’ll immediately create a comfort zone. It’s important to be willing to help these clients get acclimated to their new environment, so it’s good idea to have some information about the surrounding areas in the leasing office. Additionally, renters who are moving from an inexpensive area to a more pricey location can experience a bit of a culture shock. In this case, promote the value of the apartment, not the price.
Getting Divorced
When dealing with someone who needs an apartment because he or she is getting divorced, it is crucial to be empathetic and flexible. This individual may have some unusual requests, such as asking you not to call him or her at home (maybe because the other person in the relationship doesn’t even know about the divorce yet). You must label your guest cards clearly to ensure that you don’t make a mistake. Then, let the renter know that his or her privacy is of the utmost importance, and that you will do everything in your power to make sure that the entire process is discreet. And for those people who don’t want to sign a lease right away because they are working on their marriage and might need to get out of a contract, you can discuss the different leases you offer, as well as any out clauses you may have.
Language Barrier
The Hispanic population is one of the fastest growing market segments for the multifamily housing industry. Therefore, it’s a great idea to have a bilingual person on your staff. If you’re not adding to your staff right now but need to be able to communicate with prospective renters for all different ethnic backgrounds, have a list of key phrases in a variety of languages handy (Berlitz Travel Guides are a good resource for this). But be careful – many languages have a number of dialects. Some of these vernaculars are not pure versions of a language; in fact, they’re often called “slanguage.” Because of this, don’t depend solely on Internet translation sites like www.freetranslation.com or www.babelfish.com. Members of our group suggested that you turn to local translators or even high school or college students to help with proper translations.
Overcoming Objections
Ultimately, there will be any number of different personalities walking through your door. Your job is to listen to the needs of everyone you meet and try to resolve any issues they may have. Some people undoubtedly will have objections, and you have to find ways to overcome them. Wendy Muse and Lisa Trosien suggest that you approach an objection with the following steps:
· Be prepared
· Present it first
· Qualify it
· Present the other side
· Admit it and move on
Whether it’s a bedroom that’s too small or appliances that are too old, your job is to help customers figure out which features mean the most to them and then show them how your property really does fulfill their requirements. You have to promote all of the great benefits your property offers and let renters know that they arrived home when they walked through your door.
Part Two: Review the Apartment Leasing Process
Mar 2nd
Anyone Can Lease Apartments
If you can read this, you can lease. If you have the desire to, you can lease. If you learn, practice and apply the necessary skills, you can lease! Leasing is just like riding a bike, playing tennis, and swimming, using a computer or any other skill that can be acquired. You can learn the skills necessary to be a successful leasing professional, and I promise that it isn’t even as difficult as it might appear!
Succeed with Confidence
When you rode a bicycle for the first time, you might have been afraid of falling and scraping your knees on the sidewalk. When you entered the swimming pool for the first time, you might have been afraid of going under. When you took your first tennis lesson, you may have become frustrated because it wasn’t as easy as it looked. The first time you sat in front of a computer you may have been afraid that you were really going to mess something up or make some important bit of information disappear forever. Once you learned, practiced and applied the new skills that each of these pursuits required, you found out that they weren’t as difficult as they appeared at first! You learned that if you fell off your bicycle, you didn’t break into pieces. After a couple of gulps of pool water, you learned that if you relaxed a little, you could float and then actually swim! The same will hold true in Relationship leasing. You’ll find that even if everything goes completely wrong on some of your early attempts, you can pick yourself up and go on to make a great leasing presentation with the very next future resident!
Practice Makes Perfect
In learning to ride a bicycle, swim, play tennis, or use a computer, you probably developed the basic skills fairly quickly, and with a little practice, then became quite comfortable with the new activity. The same will hold true with relationship leasing. If you learn proven techniques, practice and apply, you’ll become very comfortable leasing in no time at all!
Of course, it’s also necessary to put those acquired skills into action with the right attitude. I’ve found that the perception of leasing as a “sales” business and the negative stereotypes attached to sales as a profession can make it difficult for leasing professionals to place themselves in a positive and confident mindset. The word sales makes many of us think of fast-talking used car sales people or some guy on TV selling snake oil, using every trick in the book to talk people into buying a car or gadget that they don’t really want at a price they can’t afford! In fact, sales has gained a pretty bum reputation over the years – great news for comedians and movie producers, but not so great for a sales professional’s self-image. Fortunately, there is absolutely no need to use fast talk and gimmicks to be successful in leasing apartments.
This series of articles is going to show you how to use the opposite approach — integrity, honesty, and an attitude that conveys a willingness to help the future resident — to show you not only how you can increase your closing ratio, but also how powerful this leasing strategy truly is. I’m not suggesting that you merely pretend to help the future resident or to be their best friend. I’m proposing that if you simply treat the future resident just the way you would want a salesperson to treat you if you were looking for an apartment, you’ll realize an immediate increase in your closing ratio, and will be well on the way to achieving your personal best!
The golden rule is only one important ingredient in leasing success, but the others are no more complicated. In this book you are going to learn that Relationship Leasing is the easiest way to succeed at increasing your closing ratio. You will learn how the Resident and the Future Resident’s needs and wants can actually help guide you through the leasing process. In addition you will learn how to work with the future resident as the most valuable key to closing the lease, instead of against the future resident as an opponent who must be “sold”.
I can just hear you thinking to yourself right now, “If this relationship leasing technique is so great then why aren’t more leasing professionals using it?” The answer is very simple: most of us don’t begin our careers that way, and the skills and philosophies that we absorb earliest in our training, when we are most impressionable, are those that tend to follow us for the remainder of our careers. Most of us begin our leasing careers focused on ourselves and our own performance – doing all we can to just get that lease! Instead of focusing on the needs of the future resident, you probably spent the first several months of your leasing career thinking I need to get all the information on this guest card or my supervisor is going to get mad at me. Can I get them to visit the community? Will they like what I show them? Can I convince them to lease? Can I even do this at all?
Once this initial fear has passed, new leasing professionals then tend to focus on the apartments, community and services – still largely missing the needs of the future resident. “Let me tell you about our great community.” “Our service is better than the competitions.” “ We have ______ & _______ & ________ and our competitors don’t.” The truth is, our future residents don’t care if we need to fill out guest cards or what you perceive to be your competitors’ shortcomings. They are much more interested in finding out if your community offers what they’re looking for in a new home, including the lifestyle that they expect or aspire to.
Don’t just think about the features and benefits of your community. Put yourself right in the resident’s shoes. What living solution can you really provide to them? What are your apartments and community going to do to make their apartment living experience better? And also, why should they even listen to you? In the remaining articles you will learn how to totally focus on the future resident; how to adopt the future resident’s perspective; how to build the future resident’s trust; how to get the future resident to not just be willing to listen to you, but to want to listen to you, and even to guide you right through the entire leasing process. We will also review each component of the leasing process in great detail and show you how you can put the relationship leasing approach to work. This article has been provided to give you a quick overview of the entire process. We’ll begin by addressing the basic steps involved in presenting your community to future residents. We’ll continue with a list of questions that we intend to answer along the way, with the ultimate goal of helping you to become the very best relationship leasing professional you can possibly be!
Review the Apartment Leasing Process
Mar 2nd
Part One of Three: Review the Leasing Process
Over the years, several different leasing approaches and philosophies have come and gone. Our industry has changed, and more importantly, so have the people we serve. Though many of the techniques that we used in the past are still valid, many others are no longer effective. Where people once wanted to be sold, they now prefer to be served, and today’s leasing approach must fulfill this desire in order to be effective. In other words, we are no longer in the business of simply selling the features and benefits of our apartments and communities. Today’s most successful leasing strategies call for demonstrating how those features and benefits are in keeping with the lifestyle expectations and desires of our future residents. The difference isn’t as subtle as it seems on the surface. Where it was once enough to simply close a lease on an apartment that met the future resident’s immediate needs; today’s resident wants and expects a longer-term commitment. If you really want to succeed in leasing apartments you must move beyond “leasing apartments” to helping the future resident solve their moving and lifestyle needs and wants.
Information is one of today’s most valuable commodities, and as a leasing professional, you possess a wealth of information about one of the most valuable decisions an individual can make — their choice of a home. Naturally, the future resident who has gone to the trouble of contacting you has done so because they want you to help them find the new apartment home that best meets their wants and needs. Needs are easy — most of the old leasing approaches can handle needs, hands down. Wants are a little more personal. Determining what they are requires that you win a future resident’s confidence; and satisfying them means that you’ll have to develop an effective rapport. As you can imagine, conveying a committed, resident-oriented attitude while successfully satisfying the future resident’s wants and needs requires a comprehensive approach. This approach is known as relationship leasing.
Focusing on the needs and wants of the future resident is only one of the skills that relationship leasing requires. Leasing Professionals must also develop the skills to exercise personal judgment, build a long-term relationship in order to improve resident retention, ensure the ongoing satisfaction of both residents and future residents, and connect with them personally as a true professional in the apartment home decision-making process. This means knowing your resident’s needs and wants, and then positioning your community, apartments and services to remain their number one choice.
Relationship leasing involves focusing on building a relationship with the future resident. Closing ratios and leases are increased because instead of pushing apartments, you are presenting a more comprehensive commitment to improve their lifestyle and serve them throughout their residency. Relationship leasing emphasizes the intangible side of every lease. It includes not only the apartment, community and services; but also the real value that each of these offers the resident, and what you personally bring to the mix.
Relationship leasing requires leasing professionals to understand where they are coming from, to maximize their strengths, to learn new skills, and to take full responsibility for managing the leasing process. It’s your responsibility in leasing to fully understand your future residents and how you can help them before you lease them an apartment. With Relationship leasing, you are in the driver’s seat at all times. You have a clear understanding of where you are in the leasing process and what it will take to have this person as your newest resident. The days are gone of closing hard, offering a concession and overcoming objections and then hoping for the lease. With relationship leasing, you create the relationship and mix in the leasing techniques that work. The rewards of being resident-focused are increased commitment, loyalty, referrals, and of course increased occupancy and reduced resident turnover! Relationship Leasing Professionals are top producers because they are connected to their Residents beyond the scope of their apartments and services, and way beyond their competition. The key to success in relationship leasing is to understand what happens during the future residents’ decision-making process and how you can positively influence their decision.
Relationship leasing helps you differentiate yourself from the crowd of competitors first by the approach you’ll take and finally by the results you’ll obtain. Your future and new residents will view you as a true professional expert. The relationship between resident and leasing professional is powerful, and it is your responsibility to foster that relationship so that both sides win. Many of you have already experienced the power of relationship building in the leasing process with future residents who have leased from you and prefer to continue to deal with you personally when they have a service request or a problem to be resolved. The reason for this is that you did a great job of relationship building in the leasing process!
Multifamily: Is It Time To Revisit Short Term Rentals?
Feb 17th
“An Alternative Marketing Source—Increase Occupancy and Rental Income Simultaneously.” By Diane Steele
There is a lucrative market of potential renters searching for a property just like yours to live at– the corporate business market.
You may think businesses primarily rent corporate business apartments from communities that are large, have a corporate leasing team, or are a luxurious new property. This is not the case. In reality, if you can offer business clientele a clean apartment, superb service, a convenient location, affordability, a shorter lease term (usually 3 months minimum) and a commitment to making the relocation process go smoothly for all involved, you have what it takes!
In this economy, companies and businesses are searching for ways to reduce housing expenses for their temporary consultants, transferred and short term employees. In many cases, businesses have used hotels for their housing needs. Hotels charge businesses a negotiated per night rate of approximately $79-109, or $2,370 – $3,270 per month, depending upon the market.
If you take a moment to calculate what you could charge for a corporate apartment in your community and compare it to the cost of housing at hotels, the cost savings for corporations could add up to hundreds of dollars per month. It could also add up to hundreds of dollars in additional rent you could add to your property’s bottom line.
To establish a basic corporate apartment, you will need furniture, housewares, electric, telephone (with a long distance block), and cable. (There may be additional utilities or items specific to your community you will need to include.) Below is an example of expenses you will incur on a monthly basis for each apartment using this example.
Market Rent $900
Furniture $140
Housewares $35
Electric $25
Cable $45
Misc $50
Total $1,195
Now here is where your company can make a substantial profit. Compare the monthly rates companies are paying at hotels per month ($2,370 – $3,270) to the above estimated price you need to charge for a corporate unit ($1,195.) The difference between the two is at minimum $1,000 per month. There is a lot of room for you to add a corporate premium to your rent after you cover your expenses. Adding the corporate rent premium would increase your rent and at the same time save companies hundreds of dollars in housing costs per month.
Surprisingly there are additional benefits to your community other than increased rent. Some of the benefits may include;
1. Easy and inexpensive turnover costs- Many of your corporate clients secure permanent residency in other parts of the country and live in their apartments on a part time basis. Therefore, wear and tear on the apartment is far less than with a normal 12 month apartment lease. (I have experienced this type of turnover to consist of a light touch up paint, carpet shampoo, spot cleaning and changing of the locks.)
2. Repeat Business and Referrals- After you have established a solid client base with local businesses, you will create a bond in which they will continue to call upon you with their corporate and business housing needs. You will also have established contacts between vendors, other communities and relocation establishments that will also refer corporate clients and businesses to you.
3. Increased Occupancy- You will increase your occupancy by filling apartments with business clientele vs. holding a vacant unit. You will also have the opportunity to convert short term leases into long term leases. Although some companies will initially ask for a 3 month lease, many often choose to renew several times afterward. In some instances, the apartment lease converts into a 6 or 12 month lease where the employee decides to relocate or is permanently placed in the area.
This all sounds great, but how do you know if this is right for your property? Where do you start? What do you charge? Well, you need to do some of homework. Here are a few places to start:
1. Call all corporate apartments in your neighborhood and surrounding area for prices, amenities and ideas. This will give you a feel for the market, what is available and what you need to offer to be competitive. This process will also give you a good idea of your property’s potential price point.
2. Call a few local hotels and ask what they charge for a 30 day stay or longer. Make sure you contact the extended stay hotels that cater to this type of corporate housing need.
3. Make calls to your necessary vendors (furniture rental companies, cable, etc.) to help you determine your overall costs. Remember to calculate installation and delivery charges into your costs.
4. Think about the type of apartment you have the largest inventory of or the type that is the hardest to move. This may be the apartment you feature for this situation.
5. Determine the number of apartments you are willing to rent on a possible short term basis at any given time of the year. You need to be careful here and remember to diversify your units. As you need to stagger the months your leases expire on your long term leases, you do the same with business corporate units. Resist the temptation if you come across it to move 25 corporate apartments in the same month and face the same 25 vacancies in three months. This is a formula for Short Term gain and Long Term stress.
6. Determine your competitive corporate rate. Make sure you are comfortable with this price and that others are willing to pay it. Ask for feedback from those you know in the apartment referral business about your program. They will be honest with you and let you know if they could send potential renters their way.
Now that you have a good idea of what you should charge, where do you find people to rent your apartments? Here are some quick ideas:
1. On a map, circle a 5 mile radius around your property. Take a few hours from your day when it may be slow and drive around to all areas included within this 5 mile radius and write down as many businesses as you can think of that may have housing needs. Look at both small and large businesses. Contact those businesses either by telemarketing or person cold calling. You can start with HR or any administrative assistant who may make housing arrangements for a company. Remember to ask for referrals if they don’t have any needs.
2. Go through your resident apartment files and determine where most people currently work. Pay special note to any residents who may be consultants or in IT. There is huge potential here.
3. Inform all of your vendors and referral services you are offering corporate apartments. Prepare a flyer with all of the necessary information for them to refer to in the near future.
4. Send out a letter to your current residents informing them of the corporate business apartments now available at your community. Offer a one time referral fee to anyone who refers their company to your community that ultimately results in a rental for you.
You have the opportunity to save companies money and offering their employees a comfortable home away from home. Companies are waiting for you to offer your property to them and rescue their employees from the four walls that are slowly closing in on them in their hotel rooms. (I moved an employee into an apartment after living in a hotel room for 3 years!)
With a little research and a little more work, there is great potential for you and your company to increase rent and occupancy simultaneously. Good luck!
Diane Steele is a sales and marketing professional located in the Minneapolis/St. Paul Minnesota area. She has worked in property management and related fields since 1988, specializing in increasing sales and occupancy quickly, corporate housing and property evaluations.
Apartment Leasing:There’s Free Rent Down the Street!
Feb 8th
There comes a time when we decide it’s time to stop giving away free rent and the competitors aren’t on the same page. I wrote this article to help you and your team make the transition.
Here’s how it started. A future resident at my apartment community sent an e-mail to his leasing professional. He’d recently toured the community, was extremely interested, and had a couple of questions about the community’s technical features. He also mentioned that he wondered why our community wasn’t offering a special incentive, since the others in the neighborhood were giving away as much as two months free rent… he was still impressed and interested, but choosing our community wouldn’t be as easy to justify.
The apartment leasing professional gave the matter a great deal of thought, then forwarded the gentleman’s e-mail message to me, having added a rather convincing case for us to consider offering concessions too. Instead, I responded with all of the reasons why, in my experience, it’s far better to avoid concessions at all cost than to succumb to them.
Our future resident, and the Leasing Professional, had a seemingly valid point. They needed a better understanding of why I continued to stick to our rental rate when our competitors were giving their apartments away for free. The crux of the matter is that our future resident and our Leasing Professional were posing an objection.
Why is it really important to avoid concessions? There are plenty of answers, but they all boil down to one basic principle – the desire for a concession is really just an objection… and objections can be overcome.
Why do Future Residents Object, Anyway?
An objection is defined as any obstacle, however slight, that stands in the way of and prevents a signed lease. Naturally, our goal is to remove obstacles, but objections must be understood before they can be removed.
Life can be pretty complicated these days. Everything is specialized and customized. Whatever we may want, we can almost always choose from several varieties of it. Now that’s all well and good, but if you’ve ever wasted twenty minutes in the shampoo isle, then you know that choice is a mixed blessing. How do we know that underneath all the splashy colors and shapes, what’s inside isn’t pretty much the same? How could they charge me more for this one than that one? They’re all pretty much the same, aren’t they? It’s almost second nature to think “there’s just got to be more to it than this!” That need to know more — to understand the difference, to have it explained or resolved in a way that makes sense — is the seed from which objections grow.
Before we begin to analyze concession or rental rate objections and preventive techniques, you should begin to recognize all objections as a necessary part of the leasing process. No one signs a lease without first satisfying their need for information. An objection is nothing more than a request for more information, and in the case of a concession or rental rate objection they simply want you to give them a good solid reason why your community is worth paying more.
Concession and Rental Rate Objections
These objections are by far the most common and the ones that most apartment leasing professionals dread dealing with. Consider how careful you are in parting with your own money, and you’ll understand your future resident’s point of view. The key to successfully handling rental rate or concession objections is to understand the reasons behind the future resident’s protest, but to be fully prepared to defend the value that your rental rate represents.
A future resident that objects to your rental rate sincerely believes that the rate is too high. See the situation from his or her point of view. They’re worried about the cost, not just the rental rate. They’re imagining the sum that you just quoted in the context of their budget and the sum seems inordinately high. Of course, you can’t change your rental rate to suit every budget or whim, but you can change the future resident’s perceived value. How? Make the cost insignificant in light of the value that the future resident will receive in return. If they are not objecting to the rental rate then they may be asking you for a concession.
Begin by showcasing your features, services, and amenities; then explain exactly how and why the future resident will benefit from them. Remember what I said about the stresses of daily living and working these days? We’re all looking for ways to make our lives easier. Next, sell yourself. You’re there to make life easier, and that’s part of the package. Never apologize for your rental rates or for not offering a special. Quote your rates with confidence. Now you’re ready to tackle the objection head-on.
Make certain the future resident understands, and sees (if possible), all of the extras that come with the rental value (special features, appliances, amenities, services, etc.). What else are you selling? You’re selling peace of mind. The service technicians are on call twenty-four hours a day in case of a maintenance problem. You’re selling an improved self-image. Higher rent helps your community maintain a better resident profile. Everyone has to meet the same high standard, so the prospect will be living among his/her peers.
Tips for Avoiding and Overcoming Concession Objections:
1. The Future Resident understands that the fastest, most effective way to get you to lower your rental rate or give away a month’s free rent is to tell you that your rental rate is too high, or that your competition is cheaper. It works, so they use it! When the Future Resident talks about the rental rate being too high, it’s your time to talk about all the benefits the Future Resident will receiver when living in your community. When they mention that the community down the street is giving away free rent, it’s your cue to spotlight everything about your community that makes it the better choice (remember to do this professionally. The goal isn’t to trash the competition, but to show your community in the best possible light). Please don’t offer them free rent or a color television when they simply say, “Your rate is too high.” They are just trying to negotiate the price down, and it’s up to you to “stick to your guns” and illustrate why your community is worth it’s asking price.
2. JUSTIFY your rental rate. When a Future Resident says something about your rental rates, what he is really saying is that he doesn’t appreciate the VALUE your apartments and community offers. You MUST review the benefits and build VALUE.
3. If you drop your rental rate or give the Future Resident a discount, you probably don’t realize how much you have weakened your leasing position. Your response says: “This apartment and community isn’t worth very much in itself so let’s just decide how much you’ll pay and sign the lease.” In the end, your Future Resident may lose trust in you for initially asking for a higher price while trying to rip him off.
4. Realize that beneath the objection, most people generally believe that “you get what you pay for.” They will respect you and your community for successfully defending its true value, and they will be pleased with themselves for selecting a home that is worthy of its price. Cutting the price undermines your own personal reliability and respectability as a sales professional, and devalues your community and your future resident’s choice.
The objections that most apartment leasing professionals have the hardest time handling and overcoming are: “The apartments down the street offered me one month’s free rent” and “What’s your special?”
Tried and True Techniques for Overcoming Concession Objections:
LP: “I’m glad you brought that up. Let me ask you a quick question: Why do you think they are giving away______________ ?”
FR: “I don’t know, why?”
LP: “I’m not permitted to talk about our competition, but…I can tell you that we don’t have to offer specials nor do we have the type of residents who move in and out of our community because of specials.”
LP: “I’m glad you mentioned that special…let me ask you, did they guarantee that your rental rate would remain the same at the end of your lease or tell you how much of an increase to expect?”
FR: “No, they didn’t mention that.”
LP: “Specials are usually given to attract you to a community. Once your lease expires, it only makes sense that they need to recover their loss. In other words, they’ll probably need to pass along a rental increase. We feel that specials are only a temporary benefit. We prefer to offer the long-term benefit of a high quality apartment with_________ and a quality community where residents don’t move in and out looking for the next special. We prefer long-term quality and stability. Don’t you agree that’s more important?”
LP: “Thank you for bringing that to my attention. Our community is known for quality in its residents, management and service. We have a community where you can feel comfortable and confident that you and your family will be well taken care of. Don’t you feel that those things are more important than a temporary concession?”
LP: “Yes, I’ve noticed that they recently had to start giving away the moon to attract residents. I’m sure that once you compare our community to theirs, feature to feature, you’ll understand why they have a need to give away a special, and why we don’t have to.
(Use this one with Service/Maintenance Guarantees, and “You’ll Love it Here!” Guarantees)
LP: “There are many reasons why other communities have to offer specials. Our community, on the other hand, gives each and every resident dependable, caring management and service. We back it up with two very important guarantees. First, we guarantee you’ll love it here. (Hand the future resident the guarantee.) Our second guarantees you prompt courteous service on your routine maintenance requests. (Hand them the second guarantee.) Isn’t knowing you’re going to be happy and comfortable more important than a concession?”
Your Rental Rates are Too High!
What if the future resident objects because your competition costs less?
The first step is to be certain the future resident is comparing “apples to apples.” Ask the future resident is he or she genuinely sees the competing community as offering the same value as yours. Walk the future resident through a step-by-step comparison of benefits and features. When the future resident is convinced that the competition costs less, take it as a sign that you’ll have to demonstrate how the value of your community is much greater than the perceived cost difference. Prove that there is really very little cost difference, and you’re offering the better value.
Don’t concede! The future resident often views and poses a rental rate objection as the easiest means of getting you to give away a month’s free rent or to lower your rate. Dropping your rate or giving away a gift or discount as a means of overcoming objection only serves to permanently weaken your leasing position. The message is ”My community really isn’t worth much, so I’m open to negotiation. You just decide how much you want to pay – any old amount is fine with us – and then you can sign the lease.” Don’t give anything away unless you get something in return! Ask for a longer lease term, prompt rent payment by the 30th of the month, or a higher security deposit. View every concession as a loss of profit, and protect your community from that loss by getting a return on your investment!
No matter where your community is located or how low or high your prices are, you have probably heard, “Your rates are too high!” or had someone hang up on you after you gave them the rental rates. Why do future residents raise the price objection?
Let’s take a look from the future resident’s point of view. Money isn’t easy to come by, and parting with it represents a bad thing – a cost. In order to justify the cost, they need to be certain that they’re getting a fair return – a value. The key to overcoming a rental rate objection is to successfully move the future resident’s focus from cost to value.
RENTAL RATE
VALUE
= COST
Value is made up of all of the benefits that the future resident will receive. Since you can’t change your rental rates for every future resident’s whim, the only thing you can change is the perceived value. In other words, you must build up the value to lower the cost of the apartment.
Help your future resident to envision and understand all your features, services and amenities, and explain why he or she will benefit from them. Remember when selling your services that everybody today wants things that make life easy, and they also want to know “what’s in it for me?” – So tell them!
Tips and Techniques for Overcoming Rental Rate Objections:
1. Compare apples to apples. “Let me ask you if we are comparing prices of other communities or comparable worth?” In other words, are the competitions “apples” the same as yours? Perhaps you’ll find its apples to oranges! Make sure the comparison is fair. A fair comparison begins with benefits and features.
2. When the Future Resident thinks that the competition costs less you must take this as a sign that you’ll have to demonstrate how the value of your apartment and community is much greater than the price difference that the Future Resident perceives. To do this you simply show that there is very little price difference. But much more value when living in your community.
3. Remember the Future residents automatically make a rental rate/value comparison to determine the COST. You must look for and increase their perceived value.
4. Understand that “your rental rates are too high” can be a buying signal. Don’t let it slip away!
5. If you get backed into a corner and have to quote the rental rates before you are ready, try saying, “Let me tell you what’s included in that rental rate,” and then go straight into all your benefits.
6. The price objection is usually a hidden request or a way to hide the real reason for not leasing. Don’t give up! You now have an opportunity.
7. Break the monthly rent down by the week or the month.
8. Question the competition’s lower rental rate. Why do they charge less? Where do they cut expenses to operate the community? Service? Lawn Maintenance? Etc.
9. Offer a written guarantee that they’ll be happy living in your community.
10. Admit that your rental rate is higher and tell why, i.e., services, maintenance, grounds, amenities, quality, etc.
11. Be confident that your apartments and community has good rental rates for the value. Your confidence is contagious and will rub off on your Future Resident. When you hear “Your rate is too high” or “That’s more than I wanted to spend”, you will be glad to answer with enthusiasm if you develop your skills.
12. Try asking, “Compared to what?” By saying that, you will isolate what the Future Resident thinks is the going rate and then sell VALUE, don’t sell price.
13. Energy efficient – you’ll save $ on utilities. Point out all the energy saving features of your apartments.
14. Figure out what the real objection is.
a) The rate is more than the Future Resident budgeted.
b) The rate is more than the competitions.
c) The rate is unexpected.
In handling:
a) More than budgeted: Find ways to suggest economics.
· What is the rate per week? Per day?
· Closer to work?
· More energy efficient, explain to them why and what you have to offer?
· What other areas will the Future Resident save $$$ in? Services? Time?
b) The rate is more than the competition:
· Build Value
· How are your apartments and community different?
· Compare the floor plan, which layout is better for them
c) The rate is unexpected: This objection is probably the easiest. Simply show and tell the Future Resident why the rate is reasonable. Review ALL the features / benefits and services.
How Well Do You Handle Rental Rate Objections?
Test Your Rental Rate Objections Handling Skills.
Never Sometimes Always
I give up if a Future Resident objects. _____ _____ _____
I feel like I should offer a concession/special
I get defensive. _____ _____ _____
I argue the rate is valid. _____ _____ _____
I feel rejected. _____ _____ _____
I feel that the rental rate is out of my control. _____ _____ _____
I ignore the objection and keep selling. _____ _____ _____
Add up the total number of points. 1 point for each never, 2 points for each sometimes and 3 points for each always. If you scored between 7 and 10 points, you are doing a good job. Between 11 and 15 points, work on fine tuning your skills. If you scored between 16 and 21, work on your skills so that you will be able to close more leases.
