The Concessions Trap

What is it about living in your community that you want your residents to talk about?  The pool? The workout room?  The spacious units? The great parties?  How about the cheap rent?  Be careful before you answer that last one.  Particularly if you're using concessions as a primary incentive to move prospective residents to becoming residents.  According to one multifamily blogger, while concessions are quite popular in our industry, they often have the affect of keeping the new resident focusing on the rent--not the value of the their overall living experience. And this is on top of the obvious downside-the negative impact on NOI.  

Since concessions are used to gain a competitive advantage, where's the advantage if everyone is doing it?  What if prospective residents were truly sold on the value of the lifestyle options in your community?  Options like social events, community service opportunities, exercise groups, and possibility of meeting new friends with similar interests.  Of course there are plenty of other features that may draw residents to your community, but the human factor is one of the most attractive in our increasingly fragmented society.  

So, as you meet with prospective residents, remember that how you attract them is usually how you'll keep them. Is low rent or concessions really the thing you want them to remember?  

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