Stating the obvious is seldom an over-statement. It’s the thing right in front of us. We all know it’s there, we’re just not seeing it. Or worse, we see it and ignore its existence. What is the most expensive space on property?
The most expensive space at any multifamily property is empty space. Pick a name; vacancy, un-occupied units, empty’s. By any name it is space available for lease that is not leased. An apartment is a perishable commodity. When a cruise ship leaves port for the week vacancy is set in stone for the entire cruise. In multifamily, we have a stationary asset but still multiple “cabins”. Every day of vacancy is a day of lost revenue that cannot be recouped.
Efficiency in leasing requires preparedness. To the best of your ability, all available units should be made ready, particularly assuming you have various floor plans, bedroom counts and square footage. This selection adds to marketability and choice for potential customers. Potential tenants want to see the specific unit they may rent (if at all possible) versus a like unit in another building.
Complacency is not an option. A proactive perspective is imperative. Well trained personnel are the front line defense to address vacancy and should be compensated accordingly. As the old saying goes its difficult to believe that military contracts should always go to the lowest bidder. Competency is key. We don’t want “Joe College” who graduated with a 2.5 GPA building missile systems given the opportunity to hire better qualified achievers. The same is true for leasing staff. Hire the right people with the right skill set to get the job done, not the least expensive person to hold a seat down. Train consistently. Compensate accordingly.
There are only so many hours in a day, operations are a constant, existing customers require attention. How do we focus on vacancy in the midst of the normal organized chaos of multifamily management? First, if this is the business you are in, then you already know eliminating vacancy is the fastest method for improving cash flow. That said, aside from maintaining current customers (by starting the renewal process for current tenants 45 to 60 days before lease expiration to minimize future vacancy) all eyes should be focused on that precious commodity spoiling at the end of the day- vacancy. After safety and servicing current customers there is no better use of management’s time.
About This Blog
Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel. For more information, visit: http://www.MultifamilyInsight.com