Rent Increases & Concessions Part One
One of the primary reasons that companies and communities fall short of leasing at optimal rental rates is that the importance of value isn’t given the attention it deserves. Training isn’t so much what’s called for in this instance as indoctrination.
In order to successfully convince residents and prospective residents to lease at a higher rental rate and without concessions, we must be capable of conveying and demonstrating value in all that we do and say.
We’ve spent a lot of time on value in the articles , but I want to say this explicitly so that it’s really in the forefront of your mind—value is the very foundation upon which optimal rental rates are built; so it really needs to permeate all that we do.
LEASING FROM A VALUE PERSPECTIVE
Without a clear definition of value, it’s impossible to negotiate effectively when leasing or renewing a lease. After all, how can a leasing professional build their rental rate confidence around a concept that they cannot define? While value is defined, in part by the unique wants and needs of the specific resident or prospective resident with whom you’re dealing, which gives them some measure of control in the process, the larger part—by far—is in the hands of the Leasing Professional and the lifestyle you’re proposing.
Here, let me step aside and point out that I just said lifestyle and not just the community, or apartment, or services, or amenities. Because you’re not selling just one thing—that’s a mistaken way of thinking to which too many Leasing Professionals fall prey. It’s all too easy to equate the rental rate with only (or mostly) the apartment on offer; but in value leasing, we must never fail to realize that the rental rate represents the full spectrum of what our community offers—from what the resident and prospective resident can see, touch, and hear to what it makes them feel—tangibles and intangibles alike; and that’s a lot of territory for one figure to cover.
It’s important to realize how difficult it is for a prospective resident to grasp the full extent of that territory—not having yet experienced life in our community—until and unless we can paint that picture for them. And painting that picture effectively for them requires that we know it exceptionally well, ourselves.
By showing that we, as Leasing Professionals, have a complete grasp of the rental value and a full command of what it includes and represents, we immediately change the discussion from one of rental rate alone to one of rental rate as it relates to value. The truth is, our goal is not to make the resident or prospective resident feel entirely comfortable with our rental rates; because if they do, then our rates are—more than likely—too low. The better scenario is when the resident or prospective resident acknowledges that the rental rate is fair or reasonable given what they’ll receive in return.
And of course, to convey that level of confidence, Leasing Professionals have to have that level of confidence, themselves. Any knowledge of the value we deliver gives us greater control over, and confidence in, our rental rates; so it’s crucial to understand some fundamentals about residents and prospective residents and what they value.
To convey this confidence, we need to recognize, understand and focus on the full range of value that we provide with the steadfast understanding that we have a right to charge appropriately for that value. We must implement that demonstrate this level of value in the leasing and retention process, continually; and that’s what constitutes value-based leasing.
Indoctrinating Leasing Professionals into the school of value-based leasing begins by instilling an understanding that the time available to us on the front end of the leasing process—the time in which we must build the momentum that will carry us through to renewal—is a scarce resource and has to be used as effectively and efficiently as possible to set the stage for our value to truly shine through. The biggest impediment to this is nervousness or uncertainty, on the part of the Leasing Processional, that the rental rate they’re striving for is too high. When that nervousness or uncertainty exists, it’s nearly always detectible by the resident or prospective resident, and gives them a huge opportunity to gain the upper hand.
Join us next week for Part Two of RENT INCREASES & CONCESSIONS
Read More Now The Leasing Professionals Guide to Eliminating Concessions, Raising Rents and Selling Rent Increases Every Time