Spring Back Into Shape
Submitted by J. Debes
In many parts of the country, leasing activity at multifamily properties corresponds with seasonal changes due to climate (people don’t like to move in cold, snowy weather), the school year (most families move during the summer so as not to interrupt schooling), and holidays (typically slowest time of year for leasing). Late spring and early summer naturally tend to generate the greatest amount of leasing traffic and is, therefore, the time when multifamily managers/operators should focus their efforts in preparing their properties for this prime season.
Curb appeal is one of the most important aspects to successfully leasing and managing multifamily properties. In climates with four seasons, it is important to prepare for spring by scheduling contractors before the weather improves to make sure your properties receive immediate attention. Asphalt plants typically open in mid-April and if you wait for them to open before contracting for winter related roadway repairs, you may find yourself on the contractor’s schedule in summer instead of early spring. Few things detract more from curb appeal than a large pot hole. Likewise, if you wait for fair weather to initiate your search for a landscaping contractor, it will take you weeks to hire one and even longer to get your properties back into shape after the winter. Landscaping contractors get extremely busy in the spring. Ideally, you should have your landscaping contracts executed in early March. That way, your lawn care service provider has your spring clean-ups, bed edging, and mulch scheduled for late April, beginning of May. Investing in good curb appeal is one of the best investments any owner can make. Countless studies have confirmed that prospective renters often form an opinion of a property within the first 30 seconds of a visit based on a property’s curb appeal.
When demand for apartments increases in spring, market rent rates generally increase. Forward looking managers and operators anticipate such increases and proactively adjust market rates when sending out April, May, and June renewal notices. If operators wait until April to raise rents, they’ve forfeited the opportunity to realize increases at renewal.
Additionally, managing lease expirations to correspond with the leasing cycle will result in greater average occupancy over the course of the year. Having a higher percentage of leases expire in the spring and early summer allows properties to fill vacancies during the period of greatest demand and highest market rents.
Good managers always plan ahead. Proactive management will always create better gains in net operating income than reactive management. Those managers than plan for the arrival of the spring leasing season will enjoy greater success and returns from investment properties.