Upgrading Your Residential Tenant: How To Do It?
The company I work for owns and manages two apartment buildings. One has over 400 units, the other has 200. The larger of the two is located next door to a university and is on a main public transit route. Its primary demographic tenancy, of course, is students.
The building itself is currently undergoing a multi-million dollar retrofit, mostly exterior. It is approximately 40 years old and continues to have its share of maintenance challenges. Interior upgrades are a slow process as we are attempting full occupancy during the retrofit. Exterior improvements will be complete in two years. The budget is very tight!
Previous property managers were paid a commission for the occupancy rate. Often, "questionable" tenants were allowed residency only to satisfy the commission pay out and boost occupancy numbers. Little concern was given to any consequences of this tactic. The result? Frequent police visits, accusations of drug trafficking and prostitution, among other illicit activities. Place on top of that an ongoing battle with bugs, tenants who don't pay their rent, others who maliciously destroy our property, you know, the usual landlord issues...we have a cocktail of problems!
I have been tasked with the job to oversee the management and clean up of this building, inside and out! I will succeed in making it a better building...but how?
Well, step one was to regain the confidence and respect of the building's staff and management. Something that had been lost along the way. The first three months were spent assessing processes and observing operations. Then, formulating action plans with the current managers. Next, I had to gain the trust of the building owner. He had been badly burned by the previous property management company, an independent contractor who made several costly errors. The owner has become more open to our suggestions, but more work on my part remains.
I then reduced the size of the staff. Poor performers were removed. The reductions had an interesting impact on the remainder of the staff. Most were thrilled to see these people leave! It boosted morale and also put them on notice. Poor performers were no longer welcome at our building! Second, I held a staff meeting. As it turned out, there had never been one before...ever!
The purpose of the meeting was several-fold. I wanted them to understand our goals and make it clear that their suggestions for improving efficiencies were wanted and needed. Some were concerned about their jobs due to the recent staff reductions. I made it clear that if they do their job to the best of their ability their employment was secure. I also introduced Performance Reviews. Again, this type of performance measurement was never used in the past. We needed to illustrate how this new process can be open and beneficial to both staff and management.
Two weeks following the staff meeting I commenced with the Performance Reviews. Each member was given a review to complete and we would compare notes. It was to be an opportunity to learn more about our staff. I was in for some surprises! Many were over-qualified for the tasks they have been assigned. Others were new to the country and grateful for employment. Some even offered new suggestions on how to improve our processes. It was very exciting!
We have installed new Policies and Procedures which will continue to change and grow. Again, this was a first. So far, this has worked well. The staff have responded positively to our objectives and methods of achieving them. I have buy-in!
Now, for the tenants...
As previously stated, most are university or college students. Our turnover is as expected with April and September being our busiest months. The rents have been kept low due to the disruptions the construction retrofits have, and continue, to create. However, this will change when all is complete in two years.
Needless to say, the owner wants to recoup some/most of his investment by raising our rents to new tenants. Please note: We must abide by government regulations when applying for, and comply with, their decision regarding a rent increase. The balance leans heavily in favor of the tenants, at this time. With that said, I would like to see a more stable and responsible tenancy in the near future.
How do we accomplish that? What steps are required to make a successful transition from student housing to something more upscale/profitable? Or, are we going about this all wrong? Should we stick with the status quo?
I would appreciate your thoughts/comments, especially if you have traveled this particular road.
I look forward to hearing from you. I can be reached via LinkedIn, or email me at
millenniumstrategy@yahoo.com
Thank you!
The building itself is currently undergoing a multi-million dollar retrofit, mostly exterior. It is approximately 40 years old and continues to have its share of maintenance challenges. Interior upgrades are a slow process as we are attempting full occupancy during the retrofit. Exterior improvements will be complete in two years. The budget is very tight!
Previous property managers were paid a commission for the occupancy rate. Often, "questionable" tenants were allowed residency only to satisfy the commission pay out and boost occupancy numbers. Little concern was given to any consequences of this tactic. The result? Frequent police visits, accusations of drug trafficking and prostitution, among other illicit activities. Place on top of that an ongoing battle with bugs, tenants who don't pay their rent, others who maliciously destroy our property, you know, the usual landlord issues...we have a cocktail of problems!
I have been tasked with the job to oversee the management and clean up of this building, inside and out! I will succeed in making it a better building...but how?
Well, step one was to regain the confidence and respect of the building's staff and management. Something that had been lost along the way. The first three months were spent assessing processes and observing operations. Then, formulating action plans with the current managers. Next, I had to gain the trust of the building owner. He had been badly burned by the previous property management company, an independent contractor who made several costly errors. The owner has become more open to our suggestions, but more work on my part remains.
I then reduced the size of the staff. Poor performers were removed. The reductions had an interesting impact on the remainder of the staff. Most were thrilled to see these people leave! It boosted morale and also put them on notice. Poor performers were no longer welcome at our building! Second, I held a staff meeting. As it turned out, there had never been one before...ever!
The purpose of the meeting was several-fold. I wanted them to understand our goals and make it clear that their suggestions for improving efficiencies were wanted and needed. Some were concerned about their jobs due to the recent staff reductions. I made it clear that if they do their job to the best of their ability their employment was secure. I also introduced Performance Reviews. Again, this type of performance measurement was never used in the past. We needed to illustrate how this new process can be open and beneficial to both staff and management.
Two weeks following the staff meeting I commenced with the Performance Reviews. Each member was given a review to complete and we would compare notes. It was to be an opportunity to learn more about our staff. I was in for some surprises! Many were over-qualified for the tasks they have been assigned. Others were new to the country and grateful for employment. Some even offered new suggestions on how to improve our processes. It was very exciting!
We have installed new Policies and Procedures which will continue to change and grow. Again, this was a first. So far, this has worked well. The staff have responded positively to our objectives and methods of achieving them. I have buy-in!
Now, for the tenants...
As previously stated, most are university or college students. Our turnover is as expected with April and September being our busiest months. The rents have been kept low due to the disruptions the construction retrofits have, and continue, to create. However, this will change when all is complete in two years.
Needless to say, the owner wants to recoup some/most of his investment by raising our rents to new tenants. Please note: We must abide by government regulations when applying for, and comply with, their decision regarding a rent increase. The balance leans heavily in favor of the tenants, at this time. With that said, I would like to see a more stable and responsible tenancy in the near future.
How do we accomplish that? What steps are required to make a successful transition from student housing to something more upscale/profitable? Or, are we going about this all wrong? Should we stick with the status quo?
I would appreciate your thoughts/comments, especially if you have traveled this particular road.
I look forward to hearing from you. I can be reached via LinkedIn, or email me at
millenniumstrategy@yahoo.com
Thank you!
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Charlotte Property Management