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LEASING & MARKETING MULTIFAMILY

Jennifer A. Nevitt Bravo Strategic Marketing, Inc. www.bravostrategicmarketing.com www.apartmentmarketingcoach.com. LEASING & MARKETING MULTIFAMILY. Presented to the Kenney Properties June 26, 2002. “Fiduciary Responsibility”

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LEASING & MARKETING MULTIFAMILY

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  1. Jennifer A. NevittBravo Strategic Marketing, Inc.www.bravostrategicmarketing.comwww.apartmentmarketingcoach.com LEASING & MARKETING MULTIFAMILY Presented to the Kenney Properties June 26, 2002

  2. “Fiduciary Responsibility” Fiduciary responsibility is when someone has entrusted his or her assets to another’s care. LEASING & MARKETING MULTIFAMILY

  3. In real estate, it’s doing activities that are in the best interest of the real estate asset or owner. LEASING & MARKETING MULTIFAMILY

  4. Risk Continuum LEASING & MARKETING MULTIFAMILY High Low

  5. List Prices in All Media LEASING & MARKETING MULTIFAMILY

  6. Real Estate Economics a. Hold/Sale Methodology b. Valuation Techniques c. Cost/Benefit Analysis d. Rent vs. LEASING & MARKETING MULTIFAMILY

  7. Net Operating Income LEASING & MARKETING MULTIFAMILY Net Operating Income [NOI] is the total income less operating expenses

  8. LEASING & MARKETING MULTIFAMILY • Definitions: • Capitalization Rate is the price divided by Net • Operating Income in a projection model (budget). • Cash Flow is all deposits less payments made • including the mortgage payment. • Cash on Cash is all deposits less payments made • minus the debt service divided by the down • payment. • Debt Service is the principal plus interest payments • made towards a loan.

  9. LEASING & MARKETING MULTIFAMILY • Definitions: • Down Payment is the amount of money give to • seller by buyer to entice the seller to complete a • transaction. • Expenses are all operating expenses above the • Net Operating Income line. • Gross Income is the anticipated income from all • operations of the property and adjusted for vacancy. • Gross Rent is the gross potential rent less vacancy • and concessions or discounts.

  10. LEASING & MARKETING MULTIFAMILY • Definitions:  • Gross Rent Multiplier is a rough indication of • relative value. • Proforma Capitalization Rate is the sales price • divided by Net Operating Income in a projection • model (budget), using next year’s Net Operating • Income because it is buying a future income stream. • Sales Price is the contract price before any • deductions. • Value is the sales price a buyer would pay and a • seller would accept in a transaction.

  11. LEASING & MARKETING MULTIFAMILY Proforma Capitalization Rate

  12. LEASING & MARKETING MULTIFAMILY Value

  13. Economic Occupancy LEASING & MARKETING MULTIFAMILY Economic occupancy is the percentage of Gross Potential Rent [GPR] that you actually receive.

  14. Economic Occupancy LEASING & MARKETING MULTIFAMILY Calculation: For example, Gross Potential Rent - Vacancy - Concessions - Non-revenue producing income (value of employee apts., models, etc.) = $

  15. Economic Occupancy LEASING & MARKETING MULTIFAMILY Take that dollar result and divide it by your Gross Potential Rent.

  16. Economic Occupancy LEASING & MARKETING MULTIFAMILY This result should be within ½ of 1% to 1% of your physical occupancy measured at the end of the month.

  17. Economic Occupancy LEASING & MARKETING MULTIFAMILY If you do a weighted average for your physical occupancy, your economic occupancy and physical occupancy should be very, very close.

  18. Economic Occupancy LEASING & MARKETING MULTIFAMILY Remember that if you subtract all items mentioned previously from the Gross Potential Rent to arrive at the economic occupancy, you must have counted them originally in the Gross Potential Rent. To verify this, look at your Rent Roll Report.

  19. Economic Occupancy LEASING & MARKETING MULTIFAMILY Use “Models” as an example: if it shows zero on your Rent Roll Report, it is not in your Gross Potential Rent and should not be subtracted.

  20. LEASING & MARKETING MULTIFAMILY “Scarcity is the present or anticipated supply of an item relative to the demand for it. In general, if demand is constant, the scarcity of a commodity makes it more valuable.” Source: The Appraisal of Real Estate – Eleventh Edition Appraisal Institute

  21. Employment Drives the Success of Multifamily LEASING & MARKETING MULTIFAMILY

  22. Market Demand LEASING & MARKETING MULTIFAMILY

  23. “A market in which the forces of supply and demand are in balance will result in prices significantly different from those produced by a market in which supply and demand are out of equilibrium.” LEASING & MARKETING MULTIFAMILY Source: The Appraisal of Real Estate- Eleventh Addition/ Appraisal Institute

  24. “Sluggish purchasing power keeps the pressure on supply in check. If purchasing power expands the supply of a relatively fixed commodity, it will dwindle and create a market-driven demand to increase the supply.” LEASING & MARKETING MULTIFAMILY Source: The Appraisal of Real Estate- Eleventh Addition/ Appraisal Institute

  25. Do you have a marketing or sales problem? LEASING & MARKETING MULTIFAMILY

  26.  Traffic: Qualified or Unqualified? LEASING & MARKETING MULTIFAMILY

  27.  Online Application Processing LEASING & MARKETING MULTIFAMILY

  28.  List Prices in All Media LEASING & MARKETING MULTIFAMILY

  29. Total Units X .20 LEASING & MARKETING MULTIFAMILY = Monthly Walk-In Traffic Necessary to Maintain 90% Occupancy

  30. LEASING & MARKETING MULTIFAMILY 300 20% 59 Actual Total % of Monthly  Units = Traffic Traffic to Total Units

  31. Sources of Walk-In Traffic LEASING & MARKETING MULTIFAMILY • Apartment Publications • Internet • Apartment Locators

  32. Sources of Walk-In Traffic LEASING & MARKETING MULTIFAMILY • Weekend Directional Signage • Resident Referrals

  33. Ensure Market Demand -- Exhaust All Sources LEASING & MARKETING MULTIFAMILY

  34. Internet Marketing Plan download free at LEASING & MARKETING MULTIFAMILY www.apartmentmarketingcoach.com!

  35. Minimum Assumptions  All administrative team members have an individual e-mail address Sally@GreatApartments.net All administrative team members have Internet access  300 unit property  All prices are approximations Example Taken from Bravo’s Internet Marketing Plan

  36. Domain Registrations Secure/register domain name(s).a. Register a primary domain name ………………………….. $35/per www.HarbourIsleApartments.comb. Register a secondary domain name …………………………... $35/perwww.LiveOnAnIsland.com Suggested Vendor: www.Register.com Example Domain Extensions .com .net .org Example Taken from Bravo’s Internet Marketing Plan

  37. Call Tracking II. Secure call tracking numbers for all Internet vehiclesa. Secure seven (7) 800 numbers @ $60.50 each per month /$423.50 total per month: 1. Corporate Web site 2. Property specific Web site 3. Apartments.com 4. Homestore.com…continued Taken from Bravo’s Internet Marketing Plan

  38. Call Tracking a. Secure seven (7) 800 numbers @ $60.50 each per month /$423.50 total per month: 5. ForRent.com 6. ApartmentGuide.com 7. Rent.com Suggested Vendors: www.WhosCalling.comRon@WhosCalling.com or www.CallSource.com Taken from Bravo’s Internet Marketing Plan

  39. Web Statistics III. Contract with Web statistics providerto track activity on property specificWeb site ……………………….. $695 Contact: Kevin Vaudry Kevin@deepmetrix.com www.DeepMetrix.comor www.WebTrends.com Suggested Vendors: Taken from Bravo’s Internet Marketing Plan

  40. Web Design Specifications IV. Sign contract with content consultant for development of Web design specifications and content audit during Web design process …………….. $5,000 Impact Marketing & Training Lisa Trosien Lisa@ApartmentExpert.com Suggested Vendor: Taken from Bravo’s Internet Marketing Plan

  41. Web Design Contract V. Sign contract with Web site design firm ……………………………. $5,000 Contract should include: a. Design Web site for propertyb. E-brochure development and designc. Banner design and developmentd. Auto reply design and development Suggested Vendor: www.WebWorksPro.net Results@WebWorksPro.net Taken from Bravo’s Internet Marketing Plan

  42. Web Site Content Updates VI. Sign monthly contract for updating Web design content, search engine postings and secured site hosting….$120 monthly WebWorksPro.net Results@WebWorksPro.net Suggested Vendor: Taken from Bravo’s Internet Marketing Plan

  43. Online Relocation Sites VII. Sign contracts with four (4)top Internet relocation sites: a. Apartments.com Digital Disk of Property……$500  Setup Fee…………………….$250  Monthly Subscription………$249 Contact: Christian Hoegh-GuldbergHoegh-Guldberg@Apartments.com Suggested Vendor: Taken from Bravo’s Internet Marketing Plan

  44. Online Relocation Sites VII. Sign contracts with four (4)top Internet relocation sites: • Homestore.com •  Setup Fee………………….$250 •  Monthly Subscription……$309 • Contact: Tricia Wardtricia.ward@homestore.com Suggested Vendor: Taken from Bravo’s Internet Marketing Plan

  45. Online Relocation Sites VII. Sign contracts with four (4)top Internet relocation sites: • ForRent.com Setup Fee…………………….None •  Monthly Subscription….…..$149 • Contact: • Julia Price Price@ForRent.com Suggested Vendor: Taken from Bravo’s Internet Marketing Plan

  46. Online Relocation Sites VII. Sign contracts with four (4)top Internet relocation sites: • ApartmentGuide.com Monthly Subscription……$149 •  Front Cover Community/limit three months per year…$250 per • Contact: • Rodney Hooks • RHooks@HPCPub.com Suggested Vendor: Taken from Bravo’s Internet Marketing Plan

  47. Online Apartment Locator • Sign contract with one online • apartment locator service. • Rent.com •  One-Time Setup Fee.……… $99 •  Pay for Performance Fees…$500* Contact: Thornton Michaux TMichaux@Rent.com Suggested Vendor: *Estimate of Referral Fees Taken from Bravo’s Internet Marketing Plan

  48. Monument Sign Domain Graphics IX. Sign contract with signage company to produce letters in secondary domain name on main monument sign………$450 GREAT APARTMENTS www.LiveHere.com Taken from Bravo’s Internet Marketing Plan

  49. Yellow Pages • Contact local Yellow Page representative immediately to add secondary domain name to Yellow Page line listing…$90/mo. • Great Apartments 000-000-0000www.LiveHere.com Example Taken from Bravo’s Internet Marketing Plan

  50. Net Shopping • Contract with a Net shopping • firm and shop your onsite team bi-monthly. • a. NetMysteryShopper.com •  One-Time Setup Fee/Report…$149 •  Bi-Monthly Subscription……..$119 Suggested Vendor: www.NetMysteryShopper.com Mike Hinton Results@NetMysteryShopper.com Taken from Bravo’s Internet Marketing Plan

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