The Commercial Real Estate Alpha Site

Investment Commentary by principals Josh Diggs, Dan Pepper, Rachael Munkwitz via Palm Companies

As many apartment rents flatten, we continue sharing tips to improve NOI through other methods.  Last time we reviewed methods to reduce expenses.  Here we focus on retaining tenants, which provides a two-fold advantage:  higher collections and lower turn expenses.  

• Provide Improvements – if you plan to install LVT flooring in each apartment once it turns, work with the resident to install it now.  You won’t incur any costs beyond what you had budgeted, and residents appreciate the improvement. 
• Set Deadlines for Renewal Offers – contact residents 2 months before their lease expires, and require a response within 2 weeks for example.  Residents are more likely to renew.  And if they vacate, you’ll have more advance notice.
• Quickly Reply to Maintenance Requests – the best customer is your current one.  If a tenant requests maintenance, reply quickly even if the answer is “the appliance crew can’t come until tomorrow.”  If HVAC needs replacement, provide a temporary portable air conditioner until the work is done.