hubbuzz blog

We all have one or two too many things to keep an eye on, and the idea  of adding more “stuff” to our list of ongoing maintenance is a painful prospect. However, maintenance has real meaning when it comes to successful leasing operations. And I’m not talking about maintenance like cutting the grass or caulking the windows.

I was reading a series of questions/statements followed by answers/rebuttals on a real estate website today and ran across the following claim:

Survey after survey confirms this: people who place an inquiry online expect to be responded to immediately. Not “tomorrow,” but immediately. Those same surveys confirm that when those inquiries are responded to within four hours, in the vast majority of cases, the buyer stays with the agent who responded into the sale (that is, more than 82% of the time-Source: CAR)… A prompt response sets the stage for a successful conversion from inquiry to interested party. In an on-demand world, you need to be available immediately when that first inquiry is made. (source: Mike Parker, www.rismedia.com)

Now, granted, this is a for sale real estate site, so there’s no pure apples-to-apples comparison. Maybe it’s different when a prospective renter hears back from a property. Or maybe it’s not. Would anyone deny that the Internet (along with cell phones, faxes, instant messaging and Twitter) has made us more demanding?

Everyone who is an Internet shopper, even apartment hunters, think that there might be someone on the other end of that email they send at 11:30 at night asking about the one-bedroom plus den. So how quickly does your leasing team get back to the email leads that come in? We know we have a lot of users who indicate that they’re moving ASAP. A quick response to them might just be a winning response!

So a maintenance task that might have a lot of meaning is to make time every day to respond to email leads. Are some of them just fishing expeditions? Yes. But some of them are in a hurry and need to move – so hurry them right into your place.

We had a conversation earlier this year with a large community who told us they respond to NO email leads. Hmmmm. I don’t know what their occupancy rate is, but it would have to improve if they changed their policy on email leads. Maybe now that leads are getting harder to find, they will.

So what did we learn? One of the most important things we learned is that website users don’t read – at least not in the way that we’d like them to. They scan.

There’s a lot of evidence to support this in research about the web. Jakob Nielsen, one of the “user experience” wunderkinds of the web, offers eye maps and heat maps (using eye tracking technology) as proof that people move their eyes around a web page in a not necessarily orderly fashion. Large blocks of copy don’t get read in the conventional manner – people’s eyes lock on to a line or phrase and then move on.

So when we designed the property overview page, we thought long and hard about how to handle the “romance paragraphs” that sometimes accompany apartment listings.  And we eventually decided that there was a better way.

“Reasons to live here” is the solution we fashioned for communicating important information about an apartment quickly. It is the space in which a property can explain why it’s worth setting up an appointment. (Or at least it should be.) The 4 reasons copy sits in a gold box on the page, right under the contact info, near the pictures and the map. It has the potential, if correctly used, to be very powerful. 

Let’s take an example:

Apartment 'A' is located in a suburb of a major city that is known for terrible traffic during rush hour periods. Its current renters are mostly young single and newly married working people. It has a pool, washer-dryer hookups, a good fitness center, it allows pets, it has covered parking. There are other properties near Apartment A that have comparable amenities. So what would be the reason to move to Apartment A? What other things can they talk about?

1. At Apartment A, you’re within walking distance of the park-n-Ride. Leave your car at home with us and save on gas and wear and tear. Mother Earth will thank you.
2. We just negotiated a great rate for our special furry residents at Bow Wow Doggy Day Care down the street – sign a lease with us and you qualify!
3. The fitness center at Apartment A has more elliptical machines than our closest competitors – you get a better workout, we get a healthy resident, and it’s all free.
4. All our new residents get a special Happy Hour cocktail at XYZ restaurant when they show their new keys to the hostess. Get your new keys here!
5. Friday night movies in the community center come with free popcorn, comfy chairs and great neighbors.
6. We have lots of two bedroom apartments available right now, with special incentives if you need some extra room.

None of those “reasons” is particularly difficult to write about, but they all speak to the prospect about the Apartment A amenities and some extra things as well. All of them would require that you look at your property from a slightly different viewpoint. What you want to do is move the reader along in the transaction, so what do you have on your property or in your community relationships with other businesses that would help make you special – and worth the time to make an appointment?

If you’d like us to help with your reasons, we’re happy to. But, remember, the best reasons are going to come from your own perspective.

A very smart guy at the University of Georgia in Athens, Dr. Russell N. James III, Assistant Professor, Department of Housing & Consumer Economics, wrote a wonderful analysis of how the various tactics that property managers employ to attract new renters pushes “asymmetric information” to the market, which results in renter dissatisfaction and higher turnover. (You'll be able to read the article yourself when it goes to print later this year in the academic journal, "Housing and Society.")

He based the paper on game theory – as opposed to chaos theory, which is what things sometimes feel like out in the marketplace. So how does game theory work in analyzing a property manager’s options to grow occupancy and income?

Here’s how the game is played: Let's pretend two managers at identical properties are both trying to accomplish the same goal, which is to maximize profitability at their property. They both have exactly the same budget. They are both playing to “win” which, in their eyes, means that they’ll stay within budget and fill all habitable vacant apartments – and, hopefully, get their company’s Property Manager of the Year award.

Manager A focuses the budget outwards and uses external recruiting expenditures like advertising, curb appeal and move-in specials. Prospective renters are attracted to visit the site and sign a lease based on this activity. However, existing residents can also see what the manager is doing, can hear about the offers and might feel as though they are entitled to some “break” on their rent or renewal as well. So they begin to experience some “dissatisfaction.”

Manager B focuses internally and uses retention strategies like maintenance responsiveness and a highly trained, well-qualified staff on site to keep existing renters happy and satisfied and, therefore, more likely to renew their leases.. These expenditures, however, are invisible to someone who has not lived at the property – and trying to build credibility with statements about service is difficult when you’re talking to skeptical prospective renters. Who hasn’t experienced a service nightmare at some point in their apartment life? (That’s why there are websites about "apartment griping".)

Based on the study, the profit performance for any property is highest using Manager B’s strategy. But, the author admits, there is good reason to deviate from the service-focused strategy.

As soon as Manager A begins her outbound advertising and offers move-in specials, she has a clear advantage in attracting new tenants, and Manager B still needs new renters. Regardless of the superior service at Manager B’s property, people move out. They get married (household formation is a big one – 1+1 does not equal 2 in this equation.) They move to a new city because of a job change. Gas prices finally drive them to an apartment location that is closer to their work.

So, in game theory, the competition for new renters encourages Manager B to roll the dice and shift some funds and/or energy to the outbound marketing strategy – and therein begins the competition. Everyone competing for the same renters using the same tactics guarantees that everyone’s costs go up and ROI follows.

In the perfect game scenario, there’s a balance between resident recruitment expenditures and resident retention expenditures. Recruitment expenditures are carefully evaluated for return on investment and software or service companies that help establish the path of a lead to a lease are helping to make those calculations easier to manage. (That’s why we’re pay for performance.) At the same time, retention requires a focus on service at the site and maintenance well beyond repairs – investment spending is critical to keep a property from the high-cost damage that deferred maintenance can cause. Sound like a high-wire act? See our article on the property manager’s job and how tough it is.

Property management companies that can establish a brand that is based on a high service profile are the only consistent “game” winners because their residents know what to expect from the brand – so when they leave a property of that brand, they often look for another property under the same brand umbrella. That is a tenuous relationship, however - failure to deliver at any one property chips away at the entire brand relationship. Then again, if it works, it works big. And that means lower new resident recruitment costs for the brand across all properties, which increases profitability.

Property managers have a ridiculous job, when you think about it. Here’s a list of stuff that could come up in one day:

• Infrastructure issues – IT, power plant/utilities, communications
• Office staff issues – late or absent or new employees who require training 
• Late paying residents – there’s always at least one
• Residents angry about billing issues – there’s always at least one ;)
• Regional managers upset about vacancies - in some markets
• Maintenance stuff (beyond our comprehension!) - every single day

And then, of course, there’s the job itself – running an apartment property, putting the best possible face on it and making sure that everything contributes positively to filling the vacant units or retaining the current base of renters, all inside the budget. (The property manager made the budget and then corporate “tweaked” it – downward – but the property manager must execute on that budget and sometimes it ain’t easy.) You have to be pretty tough to deal with all that.

So how can hubbuzz.com help? We can help by remembering that property managers do have a ridiculous job and, therefore, patience is a virtue. We can help by remembering that we’re probably not on the top of the to-do list for that property manager – not today! (See list above – they’re worried about all that stuff.)

So making ourselves easy to deal with is our best option. Here are some of the things we need to do to be helpful:

• Use straightforward communications that get to the point. It makes it easier for property managers to figure out what the next steps are.
• Use more than one type of communication – email plus phone, snail mail plus phone or whatever combination works at that property. Everyone has a different style.
• Provide proof points, statistics or something that helps make a decision easier.
• Put the important stuff at the front of the communication – the property manager who gets to read all the way to the end of something is having a quiet day!
• Occasionally just put something lighthearted out there – we can all use a smile now and then. (Just don’t overdo it.)

I try and remember the list of things that every property manager is facing every day when I’m trying to get a decision or make some progress – and I try to remind everyone here to do the same. Empathy is a very powerful thing. And of course empathy can work wonders…in both directions.

Do you have more suggestions about how to have a good relationship with the hardest-working people in the property management industry? Let’s hear about them.

Because of the way that hubbuzz.com is constructed - on a map platform that recognizes the boundaries of neighborhoods and surrounding cities - we get an interesting perspective on the way people view our cities and look for apartments.

At the same time, we are entranced with the website, walkscore.com. They evaluate neighborhoods on the basis of their “walkability” – how close are the retail and service establishments that people rely on in a high-functioning neighborhood? The theory of walkscore.com’s founders is that walkability makes a neighborhood more livable and likeable.

So we thought we would share a snapshot of hubbuzz.com’s June 2008 traffic information and evaluate some of our “busiest” neighborhoods based on their Walk Score™, using the technology employed by walkscore.com.

As you can see, there are no big surprises here - Capitol Hill is the neighborhood darling on hubbuzz.com when it comes to apartment searchign. But look at the places like Boulder, Aurora and Washington Park and Platt Park in second, third and fourth places! It seems as though for every downtown neighborhood, hubbuzz.com apartment search users put equal amounts of search activity into a suburban neighborhood like Lakewood, Arvada or Englewood.

So what’s the big attraction of the Capitol Hill neighborhood? If it’s the most popular or most searched neighborhood, does it have the highest Walk Score™?

Interestingly enough, Capitol Hill, the neighborhood with the highest page views in June on hubbuzz.com, also has one of the highest Walk Scores™, but not the highest – that belongs to LoDo. You also see high scores for Boulder, Congress Park and Five Points – there are several places with scores above 80 (which walkscore.com considers “Very Walkable.”). In fact, we were impressed by the scores in places like Brighton and Thornton. Depending on where you live in those cities/towns, walkability is high.

If you’ve ever been to the Capitol Hill neighborhood, you’d know why we see a lot of traffic and they why have a good score, almost instantly – here’s a snippet of the copy we use to describe Cap Hill in our Neighborhoods section on hubbuzz.com:

"Walking is the best bet, ‘cause almost everything you’d want is close by—restaurants, diners, used bookstores and parks. In fact, you can host a killer pub crawl starting at any one of Cap Hill’s shabby chic dive bars."

We don’t want to mislead you, of course – walkscore.com’s technology does not weigh in on “shabby chic dive bars”. But they have figured out something that can work for renters who are looking for an area of town to live in that allows them to leave the car at home once in a while. That’s something we’re all looking for as we stare down gas prices like we’ve been seeing lately.

Check back with us at hubbuzz.com – we’re going to start referencing Walk Scores in our neighborhood copy to help you learn a little more about the neighborhoods we feature. And just for further reference, if you’re searching for an apartment in Denver, you can figure out for yourself whether the neighborhood is really walkable. Here are some of the things you can look for as you contemplate a move to a new apartment in any city.

1. When you drive into the community parking lot, is there a traffic light with pedestrian signals or a stop sign that slows down traffic coming from the community?
2. Are there city sidewalks in front of the community that lead to retail or service areas that are within a one-mile walking distance?
3. Is there a safe walking trail through the property or behind the property that can get you to retail or services?
4. Are the surrounding streets tree-lined and well-marked? And lit at night?
5. Are there crosswalks at intersections?
6. Do you see anyone like you walking, even if they’re just walking their dog?
   

Test out the Walk Scores for your neighborhood and see how it works for you.  And watch for more information on neighborhoods on hubbuzz.com.

The National Association of Home Builders does a renter survey every now and then, looking for the trends that turn a renter into a home-owner. One of their questions is about the reasons that renters chose their current apartment home.

In the survey completed in 2002, renters pointed to rent level, then location, neighborhood/community, apartment availability and then apartment design and/or size.

In the 1992 NAHB renter survey, the most commonly listed reasons for choosing the present apartment were rent level, followed by location, neighborhood/community, apartment design/size, and apartment availability – which is just a change in the order of the last two factors. In other words, rent and location mattered most back then, too.

Rent level is a fixed issue for most renters – otherwise there wouldn’t be formulas about how to calculate what your maximum rent should be. Location and neighborhood or community also seem like given, but maybe that’s because it matches our hubbuzz.com worldview. So we went back into our website gestation period to find out why we thought  location and neighborhood were so important – how did we get headed down this path? 

First little epiphany: The mantra of real estate is “Location, location, location” – everybody knows that phrase, and realtors and real estate professionals use it to explain the differences in desirability of a property or home. So, we thought, why doesn’t that apply to apartment search too? Why wouldn’t renters be interested in where a property sat, whether it’s inside an up-and-coming neighborhood or next to the ocean?

Second little epiphany: “Local search” was a phrase that was growing in importance every day. We were constantly coming across articles that talked about the pertinence of finding a retailer, service provider, cultural facility, etc., and being able to map it and figure out where it was in relation to other things. Bye-bye Yellow Pages, hello world.

Third little epiphany: Because Craig Newmark, founder of Craigslist.com, said neighborhoods matter, there must be something to it. If he says so, that’s good enough for us!

So we have 14 markets built around tons of information in 526 neighborhoods. That’s today. Tomorrow there will be more. And more people will find our neighborhood information to be very helpful in finding their new apartment home. In the meantime, want to see a cool neighborhood in Denver? In Atlanta? In San Diego? We’ve got tons of them.

When hubbuzz.com was in its gestation period, pre-name, coming up with a name was quite a task – the difficulty of which we hadn’t expected. Apartments, neighborhoods, rent, spaces, places, digs, pad, home – these words, while all useful, are all very used. So we wound up with the concept of coining our own term, and it has served us well so far (though it’s sometimes difficult to communicate over the phone.)