Rental Marketing 101
Marketing 101: Doug Quattrochi
Doug: Rich and I wanted to talk about business operations as opposed to policy. We talked about laws an awful lot, and it’s very therapeutic to complain about the laws together because we’re all in it together but if we are running businesses, which we are, we need to know elements of business ops, which include sales and marketing. I am not really an expert. I know what I know from MassLandlords and I know what I know from my rental property, and I know what you all have told me, and I’ve tried to collect all these nuggets of information and put it together. But I’m caveating the whole presentation by calling this Sales and Marketing 101, so I’m sure anyone of you could school me in certain areas, and if I’m wrong, certainly speak up in the Q&A.
My goal with this, and Rich and I together, we want to make you think about something different if we possibly can, give you a new angle, a new thing to try with your business, and if we’ve done that, we would have been successful.
I want to talk about seven areas and I want to cruise through them. (1) The purpose of sales and marketing; (2) the sales funnel, which is the process of making customers; (3) brand recognition; (4) black versus white hat marketing; (5) tools to help you get customers; (6) closing tenants who aren’t decided; and (7) remarketing. So, seven areas.
(1) The first one is purpose. Now we all remember Wile E. Coyote, right? He worked enormously hard to try to catch the Road Runner – bow and arrow, rocket, all this stuff. He’s insight was well a bunch of sciences – birdseed this way, maybe the Road Runner will come to me. That of course is what we all do, none of us actually goes cold calling or cold mailing for tenants, I don’t think. Does anybody do that? No. We’re lucky to operate in an industry, which has a lot of signage and directs people to us.
But really for marketing, we want to focus on more than just the sign. It’s four areas; unfortunately, they’re all Ps. I don’t like it when it works out to be all P’s, but they’re all P’s in marketing: product, promotion, price, and process. We’re going to go through this in order.
Here’s an example of a product, two products actually; two apartments look very similar. On the left is a kitchen with the stove and that satisfies the customer’s need of fire, basically. I need a fire. I have a stove. You want to make sure you’re satisfying your renter’s needs. It’s not somebody who needs just fire probably. They probably want a fridge, and a workspace, and the ability to imagine cooking dinner there or breakfast. So when you have your product, you want to make sure you’re thinking about what your customers want. You don’t want to be selling what you have. You want to be selling what people want. That’s the first P of marketing.
I’ll give you another example. Product on the left, this house satisfies someone needs for walls. Very useful; this building does have walls, yeah but this one them imagine walking barefoot on a summer day, having a pet play, having their kids play in the yard right. That satisfies a different need entirely. Okay, this could be the same building, but it you showcase your product like that, you kind of done it to your disservice, so that’s product, trying to build what people want.
The second P is promotion, showcase your solution. We’re all familiar with Craigslist. The Craigslist ad has a price, has some descriptions, has a map, has amenities and size. Advertising is one piece of promotion, and I want you to think about everything else you do, the tour you give, the paperwork you offer. Does it look like it’s been eaten or mangled by a copy machine? Does it look crisply printed off a laser printer? Your clothing, did you just come off a sewer job, or you’re looking polished and professional? Your mannerisms, do you greet them? Do you smile? Do you make eye contact? Do you shake hands? All of this is actually promoting your apartment. You might not realize it but it’s not just the ad because the tenant, your customer is trying to decide what it’s going to be like to live here. Will this person or company be relied upon to do their job? Can I rely upon them? All of these elements go into your promotion. That’s the second P.
The third P is price where customer and business say, “Yeah, there is a possibility that we could work together on this.” The apartment on the right is beautiful. Look at that. Look at the Hancock Tower in Boston, $12,325 per month. This is real. This is real, so that tells you right away what kind of tenant you’re looking for and what type of tenant is likely to agree that they can afford that niceness. On the other hand —
Female Audience 1: Can I rent it?
Doug: [laughter] Yes. This one on the left, I love it because it’s a bedroom with an office desk and a kitchen countertop cobbled together, three rooms in one, for the low price of $600 per month. That’s not —
Female Audience 1: [unintelligible 0:04:46].
Doug: Yeah. That’s not very pretty but at that price, maybe you can agree with somebody to rent and I’ll stipulate that for every apartment there is a price. That’s the third P, price. We’re familiar with that.
The fourth one, process, is we’re going to spend some time and this leads us to a discussion with the sales funnel. In a lot of formal sales organizations, they talk about leads, they talk about candidates to being customers. This is a person who is not a customer yet but they could become one. Leads can be cold, warm, hot, or closed. A cold lead, an example is someone who calls the office and you haven’t really screened them yet. You’re screening them now; they’re kind of cold. Warm is okay, they pass the screen and you’re giving them a tour, so they’re a little bit more interested. They didn’t turn away at the phone call. You didn’t turn them away. Hot is you get the applications, so they said, “Yeah, I’m interested in this. I filled out my application. Here you go.” And they’re not closed. We all know the deal is not closed until you’ve collected the money and you’ve signed on the dotted line. That’s the sales process.
(2) Let me talk about the sales funnel. This is part two of our seven topics. The sales funnel basically helps you visualize numbers. You might have 200 people call the office and you screen them and after screening, there are 100 people who are still interested in the apartment who you’re still interested in. You might cut out 100 of them, and then at that point, you might offer to give them tours and they’re maybe between no-shows and people that you decide you don’t want to rent to. You’re left with 50 after that. Maybe after the application, you’re left with only 5, and then maybe by the time you get down collecting the money, you’ve got only one call qualified applicant and one customer. You know you can’t have more than one customer per apartment, but you might like to have two qualified applicants or three qualified applicants duking it out, right?
Okay so, how does the sales funnel work? We talked about friction in the sales funnel. Friction is the idea of resistance where somebody is going to drop off. You have 200 people calling and you have friction of like 50 percent. That means 50 percent of the 200 get burned away out of your candidate list. They’re not interested in you or you’re not interested in them. Fifty percent of 200 is 100; if you lose 50 percent of your people at around the tour stage, there’s 50 percent friction there, you’re down to 50. If you get only five applications completed or passed out of 50, then you get 90 percent friction there; 45 burn-off. Then if you’re down to one qualified applicant out of the five who have filled out applications, then you have 80 percent application friction of the application phase.
Watch this. If I eliminated a step and all the other steps remain the same, so I’ve eliminated the prescreen, the 200 people who called now get right to a tour, so I’ve increased my toll throughput. You watch the numbers the same math, same math, same math. Two qualified applicants at the bottom all because I eliminated prescreen, but there’s a price. Now you’re given 200 tours. Now these numbers really work if you have multiple units because you don’t have to look at it on unit-by-unit basis. Look at it for your whole business. Renting 30 units now, all these turnovers every year. How many people I’ve actually screened on the phone and would I be willing to do more work in order to more qualified applicants? That’s the key question: do I want to work harder on more leads? If so, try to decrease friction in your sales process. Or do I want to wait longer for that right tenant, for that qualified applicant? If so increase friction in your sales process.
Let me give you some concrete ideas. Here are ways to increase friction. These techniques are all going to be on the website. You’ll be able to download it. Try this and you’ll get fewer applicants and you’ll do less work.
Require them to email you to arrange a tour; no phone calls, email only. Some people don’t have email; they’re not in your sales candidate list anymore.
Use a phone screen and reject marginal applicants on the phone. You said you smoke? I’m sorry. I don’t rent to smokers. End of discussion.
Ask them to drive by the place first. Note that friction isn’t you’re rejecting them; it’s also that they’re rejecting you. If they drive by the place first; they don’t like the neighborhood or look at the house, or the windows looking weird to them, they’ll reject you. You’ll have less work to do; a fewer applicants, less work.
Ask them to come into the office and fill out an application. They have to be physically there first before you’ll talk with them. That’s extra step, right, so a lot of people won’t do that. That’s friction.
Require pay stubs for all tours. Hey, I’ll give you a tour. Bring your pay stubs. That’s hard. People won’t do that necessarily or require pay stubs and utility bills; even more friction. Do you need utility bills? No. But remember the point of this is to reduce the number of leads you have, less effort, better qualified. You can bet that the person who shows up with their pay stubs and the utility bills is ready to rent an apartment.
Require cosigners with letters of reference for all applications. That’s hard. A lot of people can’t do that, but if you do, you’ll have fewer applicants and less work to do. You tell them upfront.
You can set tours at specific times to each individual. “Hey, Tina Tenant. You get your tour. It’s at 2:10 on Tuesday. Be there, be square.” That’s hard. They’re going to miss it, a lot of them. Who has had a no show for a tour, right? Everybody. That’s friction.
On the other hand if you feel like, “Hey, none of the people are calling. I’m not getting enough leads.” It’s not just about the apartment price necessarily. You could have a lot of friction in your sales process.
Here’s ways to decrease friction.
Advertise that your apartment is pet friendly or smoker friendly. Now I don’t know if you run your business like that, but I tell you, if you have a pet, if you smoke, if you do both, it’s hard to find a place you want to live, so if somebody is advertising, they’re going to like rush to you.
Advertise Section 8 welcome. You can’t say I don’t take Section 8, but you can say, I love Section 8. You can’t say, only take Section 8 because that discriminates against people who don’t have it, but you can say, “Section 8 welcome.” Guarantee you’ll get a lot more calls there.
Put your phone number everywhere. Don’t make them email you. Don’t make them dig for it. Put your cellphone everywhere you can, all right? You’re going to drive yourself with calls, but you’re going to reduce friction a lot.
If you have a website, this is very important, fewer fields on the sign-up and registration forms whether you take payments online or applications online, you want the bare minimum early on. You want to get people into the process so you want to cut out fields. Ask for little or no information up front.
If you have a phone screen and you’re not getting enough leads, you have 10 questions in the screen, maybe reduce it to eight. You care about those other two, but ask them later. Don’t ask them upfront.
Have shorter applications. I’ll tell you that a lot of people brag that they have a 20-page application. That’s wonderful. If a tenant has a two-page application and a 20-page application, and they’re short on time because life is crazy, whose are they going to fill out first if they like both apartments the same?
You can use smaller fonts and fewer pages, make it look smaller you know like grade school you remember how you can cheat to make it look bigger. Make it look smaller.
Offer to fill out the application together. All these ways to decrease friction, they all increase your work. You’re going to sit there and fill out the application with them. Yeah, but you’re going to help them to schedule it, you’re going to help them get through it. You’re going to make sure all the fields are right and get more applications that way.
Give open houses instead of tours. This is more work as you’re going to stand there for long period of time but you’re not going to have a no-show problem really because it’s open house. Anybody can come and many people will who you’ve never spoken to.
Then you could actually call back or email cold leads. I personally don’t do this. If somebody calls and we don’t connect, I call them back once, but don’t chase them. You can chase them; more work for you, more leads.
Okay now that you understand the funnel, I want you to think that you should try to visualize it. That means knowing where each person is each step of the process. If you like paper, here’s an idea: one 8-1/2- inch x 11-inch sheet for each applicant, so Tina Tenant gets a page and then you have manila folders for each apartment and for each stage. Apartment 1, we’ve done a phone screen. Apartment 1 we’ve got the application. Apartment 1 we’ve passed the application. Same for Apartment 2, and as Tina Tenant goes through your sales process, you move her sheet along, so you can visualize where she is. If you want to look at all the leads you have who have completed the applications, you can open that folder and you can see there’s Tina Tenant, there’s Tommy Tenant, all these people.
If you have technology, the sky is the limit here.
Here’s a simple Excel thing that shows the tenant that tenants down this, and you have phone numbers and you can call them and you can see Tina Tenant has passed the screen and done the tour, and submitted the application, all right. But I haven’t added a column here for past application but you can see basically there’s a another step she hasn’t done yet, so [unintelligible 0:13:24]. Digital is preferable to paper because you want to look up where an individual tenant is. You can search and you can see how far they’ve got.
This is Excel. This is basic technology. This is two clicks: conditional formatting and this is formatting as table. Excel is handy. If you have, I think Buildium – does Buildium track this kind of thing, Rich?
Rich: I use Excel.
Interviewer: All right, so Rich has Buildium and so he uses Excel for lead tracking, so he can follow. This is not Rich’s sheet, but it is what he described to me. All right, that’s the sales funnel. That’s the fourth P of marketing. Marketing is product, price, promotion, and process, and we dove deep into the process, so now you understand the customers come in and you have – it’s not just price. You can toggle other things to get more customers or fewer customers. Try it. It’s real.
(3) Let’s talk about brand. These are brands. You’ll recognize this instantly. What is the power of a brand? It sets expectations. It says I know what I’m getting. Every action and every article should reinforce the brand, so everything you do and everything you give to a tenant or show to a tenant should reinforce the brand you’re going for. If you’re going for thrifty, that’s fine. It should reinforce thrifty. If you’re going for high class, reinforce high class.
Why do we care about brand? Here’s the same coffee in two different cups – excellent delicious coffee. On the left, it sells for $1; they slapped a Starbucks logo on it and it sells for $3; people are willing to pay $3. This has proven time and time again. Look in the cereal aisle next time you’re there. PriceDropper or big wheat bran cereals sells than for Kellogg’s, right? It’s just the way it is. If you want to charge a premium for your property, you’ve got to have some kind of brand. It doesn’t have to be McDonald’s. It has to be something.
Here’s an example of a super extreme brand. Chanel conveys the idea of prestige, and exclusivity, and luxury and look! They don’t even use English. Haute couture – that means fancy clothes [laughter]. That’s Chanel, right?
Here’s a completely different brand. This is LINGsCARS.com. This website is crazy. The website conveys we are insane. We are giving insane bargains. We like to have fun and actually I’ll talk about this later. They have disclosure overload. They have everything you could ever want to know on their website. It’s all there and that’s actually conveys honesty. We’ll talk about this in advertising later.
Two different brands: there’s no right or wrong, but everything you do and everything you show should reinforce what you’re going for.
Here’s some easy ways you can try to brand your rental business. You don’t have to be McDonald’s scale. You do this with a three-decker. You could have a logo that you upload as a picture on your Craigslist ad, right? If you had a vehicle, you could get it slapped on your vehicle. On Fiverr.com — it says Fiver but it’s got two R’s in it – you can get a logo for $5. I’m not kidding. Logo for $5 is not big investment. AlphaGraphics, here in Worcester, I haven’t really used Fiverr or AlphaGraphics. AlphaGraphics will take that Fiverr logo and slap it on your car, so you can get that done. If you want a sign for your properties, if you have multiple properties, if they are on busy roads, think about signage. You can get a vinyl banner at Staples with outdoor material and grommet for $50. You put it on your chain link. It doesn’t look like the nicest thing in the world, but it’s a start.
You could go upscale. There are wood sign makers in Worcester by Chandler Street actually.
You could get decals printed. Decals could get stuck to your door on storm door glass or on windows to remind your tenants as they key in or as they look outside a beautiful lawn that this is a Larry Landlord property, right, and it reminds guests. A little bit brand there.
You could get flyers printed. “Refer friends, save 10 percent off next month’s rent.” Just something little materials you hand out with your logo on it.
This one is Mike O’Rourke’s idea. I don’t think Mike is here tonight but he really likes jackets, shirts, and badges for his staff, so that when he sends one of his employees to a building, they know it’s his Worcester County Management Company. They know it’s legit. They’re more likely to let them in. They are more likely to be respectful. They feel like they were being treated by a professional association.
Finally, this is an overlooked aspect of a brand: your email signature. Let me just show you what an email signature should contain. Your name, if you’re Larry Landlord; your title, Manager Owner; your company, Happy Farm Estates LLC – I don’t know; I just made that up; phone number, if you’re emailing tenants, put the tenant phone number. If you’re emailing business contacts say contractors, put your cellphone, and if you have time restrictions, put those in there, too. People aren’t really organized with their contacts.
We all try to be. But what we tend to do is we search your email, right, and we look up the person. If your cellphone is in every single email because it’s in your signature, they’re more likely to be able to contact you. If you’re emailing tenants, put in a little instructions about what to do. You want maintenance, ask for maintenance 24/7 at happyfarmestatesllc.com/fix, whatever it is. That’s kind of awkward URL but whatever it is, remind them if you’re emailing tenants that, “Hey, our business is professional and our brand is you can call us through this process.”
Okay, so those are elements of branding, how you can try to create a cohesive picture for your tenants.
(6) Let’s talk briefly about black hat marketing and white hat marketing. Black hat versus white hat comes from computer security. Black hat programmers are the people who try to hack into computer systems for their own profit, and white hat people said, “Let’s try to do the same but when we find out what the security breaches are, let’s not steal anything. Let’s just tell the companies. They could fix it.” Black versus white, bad versus good.
This is black hat marketing. If you look on Craigslist, you’ll see this people put these little symbols in. You can make one of these symbols by holding down the alt key on a Windows machine and typing in three or four letters on the num pad and then releasing the alt key. Sometimes you get happy faces; sometimes you get big squares. Try it. If you really are interested, you can Google it and see how to do it. Don’t do it. Do it maybe one. Do maybe one, especially don’t do it in emails. You can insert these little animated things. They’re not moving. This is a screenshot of my spam filter in Gmail. All of my emails have little moving graphics in them. That’s like sick. Normal people don’t do that. That’s like a clue that this is spam and actually you see double exclamation marks.
Exclamation marks are really bad in email subjects, so if you have a tenant that’s emailed you and you want to email them back, don’t be like, “Rent my apartment now!!!” Don’t do that. I want you to know every email has a spam score. You probably don’t realize this but when you send an email, the first server that’s not you to see it will rate and say on a scale of 1 to 10, how likely are you to be a spammer. If you get over 6, 7 or higher, you’re in trouble and they look at things like did you put silly graphics in this subject, did you put in more than one exclamation mark, did you use magenta. Magenta is a bad color. Don’t put it in your signature because then all your emails then go there. I’m not joking. Magenta is a bad color. Try to have your emails with black and white to look like they were written by a person who’s too busy to flip Swift formatting because that’s what spammers do, they mess with formatting.
Here’s a good example. This is a really strong title. “8 Reasons Why You Should Rent This Apartment.” Don’t be grammatically correct and don’t write out the word eight. Use the numeral. Use a personal pronoun, “you should rent this apartment.” These are very eye catching. Who wouldn’t read that and think, “Wow! Eight reasons why I should rent this apartment? Let me see what this is.” Right, so they click. That’s what you want. I’m going to give you four bullet points here and explain them and then four again eight reasons total. These are all adopted from LINGsCARS, which I talked about as being trustworthy despite how crazy they were, these are adopted, extremely trustworthy sentiments.
The point here is disclosure by the way.
Here’s the first one. “You can trust me. In 2015, I rented over $100,000 in apartments.” Now you might not want to make yourself a target for legal services in Massachusetts but LINGsCARS says, “You can trust me! In 2010, I rented over £35 million. They’re in the UK, right? So that’s like, “Wow! This person is clearly out of their mind, but they claim that they sold a lot of cars, so maybe they know what they’re doing.” You can adopt that strategy, right? You can say how many units or how many properties or something like that.
“Look! 12 customer letters. Not testimonials not saying I have 12 customers like. Give them the full test of the letter, the whole thing is scanned and if you can upload it as a picture. You can put the whole text in Craigslist. People will read that, and they’ll be like, “Wow! This person really cared about this landlord, very interesting.”
You can say, “I am Larry Landlord as seen in The Telegram,” if you’ve been in The Telegram.
Or you can say, “I’m Larry Landlord. I’m a MassLandlords member.” If you’re a member of a professional trade association, does anybody advertise that? No. But try it because you’re reaching up. You’re better than the average. You’re a member. They can look at the site, right? The site is public. Everybody can say, “Wow! MassLandlords. It looks like the real deal.”
Finally, you can say my wife, my husband, whoever, my brother, my sister, “My wife, Lindsey Landlord, says, “This apartment is a deal!” What is that really doing? Nothing. It’s just who cares about the wife and it conveys what type of business you are ‑ family business whereas if you’re a corporate business, you can say, “We have processes that allow you to call 24/7 for any maintenance issues and we guarantee a 24-hour response time.”
Let me just explain what these four bullets, so we can.
“You can trust me! I rented a whole ton of apartments.” You got to establish trust in your ads.
“Look! 12 customer letters.” You’re going to have social proof. A lot of people rely on Facebook or Twitter for this.
“I have only 3 units. I’m too small to have a Facebook account for my rental business, so how do I get my social proof?” I can ask my tenants who as they’re leaving, did you like it? Would you write me a letter of recommendation?”
You can post that. “I am Larry Landlord, a MassLandlords member.” You’re conveying business acumen with that sentiment. Try to convey business acumen in your ads. You’re a professional, and then try to say what type of business you are. Are you a family business? Are you a sole proprietor? Are you the kind of person with corporate processes in accounting department? Let them know because disclosure helps them visualize renting from you.
Here’s four more bullet points probably more familiar.
“Efficient! Warm apt will cost less than $150 in the coldest month (average is $50).” You are talking about true cost of ownership. True cost of renting in that situation, what it would be like to purchase this product from this person. If you don’t have utilities included, that’s not known. I guarantee you people don’t disclose this especially if they have leaky electric apartments could cost $400 a month. That’s a secret. You don’t want anybody to do that. But if you’ve taken the time to make your unit efficient and if you’ve asked your previous tenants for utility bills, your current tenants. So you have a baseline, you can say with a straight face, “Hey, I’m better than average and if you rent from me, your utility bills guaranteed will be less than $150 assuming you keep the apartment at 72 or whatever it is that you want.”
You can say things like, “Full application required.” Remember we talked about friction? That’s a high friction kind of thing, but it discloses the requirement suppose you’re going to charge a lock fee. If you have too many applicants, put in the ad, “We’ll charge lock fee,” because the people who go through that will not be surprised when it comes to charged fee.
“Wash and dry hookups, shelves, closets. That’s pretty obvious but I’ll talk about why that’s important in a second.
“Call or email for a tour.” Call to action.
So, remember I said disclose the true costs, disclose restrictions. That creates honesty, even if it tends to reduce your leads, it will tend to result in more qualified leads.
“Showcase what you get for your money.” This is very important and don’t overlook storage. People think all the time where am I going to put my stuff? If you don’t have shelves or closets, it’s okay, but point out where they can put in their armoire or a trunk, or if you have basement space, you let them use it or something for specific items. I like that. You really want in your all ads to showcase what the tenant is going to get for the money.
Finally, in every advertisement, you want a call to action. You don’t want it to be implied. You want to invite them to do what it is. If it’s call or email, that great, say call or email. If it’s come to the office, that’s great. Say come to the office. But don’t leave it hanging about what they’re supposed to do. When they get it from the ad, they know what they need to do because you told them.
Okay, so that’s good marketing versus bad marketing. I hope I’ve given you some things to think about.
Let me just very quickly show you some websites, these last three areas. I think we’ll be on time to finish 8:30.
(5) Tools to check out – if you want to place an ad or you want to see what your competitors are doing, you got to check out Craigslist.org. I know there are people in this room who do not advertise on Craigslist. That’s okay but I think you should at least use it for market research and if you do post on it, remember that you’re posting on the number 10 website in the world and you’ve done yourself a good thing. I really recommend Craigslist, and if you get a lot of crap calls, think about friction and try to increase it. Put barriers in the ad. Put barriers in your process. Guarantee you will have better success with Craigslist.
Go to zillow.com/rental-manager. This used to be called PostLets. It used to farm out your listing to various higher-end sites. I recommend you look at it. It’s free if you have fewer than 50 units at the complex, so it’s probably free for most of us because we have triple-deckers.
Then gosection8.com if you’re in the Section 8 business, put your listing there. I don’t know why they can’t look at Craigslist, but I think Craigslist is full of a lot of people who play the game, “Oh, yeah. I’ll take Section 8.” Then they never return calls. Go Section 8, saying, “Yeah, I really do take Section 8.” If you’re in that business, post there.
All right, if you need help implementing some of these ideas, craigslist.org, you can hire. I’ve hired on Craigslist. I would say it’s most expensive option I’m going to recommend because you can hire some of the local and you’re going to have to offer a good wage, you get someone good.
If you want to work with some of them remotely, you can go to Upwork.com. You can hire someone anywhere in the world. I would say it’s kind of middle price range. You have to be able to manage that. You have to know how to email people or Skype with them.
Then if you want something very small and defined like a logo, you can get it done on Fiverr like, “Hey, make me a picture, or make me an ad. I don’t know how to do the formatting.”
If you have a website, remember I said not every business should have social media. I really don’t think every rental business should have a website, but if you decide that you’re large enough where you want a website, you’ve got to check out conversionxl.com. The guy who rents that, I think he’s Dutch. His name, Peep, P-E-E-P not Pep, Laja. He is so insightful about getting people to look at your site and like it and sign up. Full of good stuff, so if you have a website, you got to look at ConversionXL.com.
Okay, so those are some of those websites to check out.
You can always take out an ad in the telegram by the way and you can always be like Mike O’Rourke and just put a sign out in your yard. I know you know what, so, do we want —
Sandra: Yeah, for students.
Doug: Thank, okay. JumpOffCampus.com.
Male Audience 1: It sounds like a hotline.
Doug: It does. JumpOffCampus.
Sandra: All in one word [unintelligible 0:28:40].
Doug: JumpOff, yeah.
Sandra: There’s a fee for it.
Doug: There’s a fee. Okay, we’ll investigate. If you have and if we find that, we will post it on the message board, okay.
(6) Let me talk about closing. The Used Car Salesman – we’re all familiar with this, the guy who will say anything to get you to buy the car. Well he doesn’t have to live with you once he sold you the car. You’re out his life forever but you’re going to have to live with your tenants in some way, so should you use these tactics, maybe not, but maybe you can. But let me just give you a couple of ideas, and I want you to hold your deep concern until you get to the part where I list the caveats here.
These are phrases that tend to close people faster. You can say, “I have another applicant coming to make them payment at 6:00 PM tonight. You can take the apartment if you pay now. I’ll hold it for you, right?” That will tend to make people to hurry up. They’re like, “Oh, my God! Someone is coming at 6:00. I kind of like this place. I’m not really sure. Okay, I’ll pay.” You can say that. You can also say, “I think you would be reliable tenants, you guys. I’ll discount the rent $50 per month for you.”
Doug: I said hold it hold it. Wait! Wait. [unintelligible 0:29:51] I know people who do this and do it successfully and this will tend to make people close faster. They could be like, “Oh, this landlord likes me and I’m getting a deal. I don’t think I’ll wait until tomorrow. I’ll apply now.” Okay, last idea to make people close faster. If they’ve commented about something negative or you’ve perceived during the tour that they weren’t totally keen on something, you’re going to offer to fix it, not at some point in the future but before they move in. For instance, “Hey I know you’re worried about storage space in the bathroom. How about if I upgrade the medicine cabinet before you move in?” You offer something that will tend to make people want your apartment faster.
On the other hand, you can say things that will people tend to not want your apartment so quickly. You can say, “I haven’t received any passing applications yet.” [laughter] That will tell people, “Oh, I don’t have to worry. Maybe I’ll apply tomorrow. Maybe I’ll apply next week.” I know that it gets used if you have a tenant that you’re afraid to reject because you don’t want a discrimination lawsuit and you’re not sure what the right way to say no is. You’re not saying no. You’re indicating that there’s no rush and someone else might come sooner but that’s what you said, okay. I’m going to caveat that for a second. Just hold your thoughts.
“I’ll have to charge you $50 a month more for rent or for your dog or for your housing history.” You can say that if someone doesn’t have – you listed the apartment in $1,000. Someone comes in, and they’ve never rented before and you say, “Yeah, I’ll rent to you, but you don’t have the cosigner. I’ll do it for $1,050 a month.” All right, or you say, “Yeah, the dog. I didn’t anticipate dog, $1,050 a month.”
Audience: [unintelligible 0:31:31].
Doug: Hold that thought. You can say if they comment on the medicine cabinet, you can say, “The medicine cabinet, that’s staying the way it is and by the way, no painting ever.” So you make it known that you’re a stickler for the rules and you’re not just going to do whatever they do so they’ll be like, “Yeah, maybe we like this place. Maybe we will apply for it, but there’s no rush. We’ll decide. We’ll sleep on it.” These things will all tend to make people close slower.
Okay, caution, caution, caution: don’t ever lie. That’s not a valued brand strategy and I guarantee you word will get out. There’s Facebook. There’s Twitter. You can even post on Craigslist. I’ve subscribed to a list of Craigslist rants where people complain about landlords, and I can read people’s names and I can see property addresses. It will get out that you’re lying in order to get people to close, that you’re a used car salesman. Don’t do that.
Remember that the Mass Commission against Discrimination is watching you. We talked about this before. We talk about it all the time. They employ people to go take a tour, with some minority characteristic, but otherwise certain economic characteristics. Then they employ other people with a different minority characteristic, probably first person was one race and the second person was your race, and then they have the same economic qualifications and they look to catch you playing that game, “You look nice.” Be careful. If you say reliable, you’re really much better off saying, “You guys have way more income than you need for this apartment,” That’s much better for this reliable. That’s much less likely to get warped into, “Hey, you look like my race,” which you don’t ever want to say [laughter]. Don’t ever want to say that, okay?
Similarly for the dog. Dogs are not particularly protected. But remember in Massachusetts, you cannot charge a pet deposit. It’s a really gray area to charge pet rent, but you can charge more rent. You just have to be real sure that this dog is not a service animal and not an emotional support animal. You have to know that for a fact. If you’re not sure, that’s too gray. I really don’t recommend that because you cannot, you absolutely cannot negotiate higher rent for a service animal or ESA, emotional support animal.
Okay, so these are some ideas to help you close faster or slower. Be real careful. I believe we all played the game to some extent. Think about it. Don’t lie. Be in compliance with the law.
(7) The last topic area I want to touch on is remarketing. The best new customer is your current customer. So why should you put all the time into filling a vacancy when you get someone who really might be able to be convinced to stay? Now if they have more kids and there is not enough space, if they relocate for work, there is nothing you can do. The fact of life they’re going to move, but there are a lot of things we can do to encourage people to live with us to for long periods of time.
Regular communication I think is important. If you’re large enough to draft a newsletter, it doesn’t have to be fancy. You can do it in Word and email it. You can do in just plain email. Give them – go to Texas Roadhouse. Guarantee, they’ll give you free appetizer coupons to give your tenants. I guarantee it. You can give other tips like, “Hey, it’s winter. Don’t use space heaters. They could blow up in a ball of flames.” That helps you as well as the tenants, right?
Email and text every time you get a rent payment. It’s an opportunity to touch your customers and say, “Thanks for the rent payment. Is there anything I can do for you?” That makes people feel good and encourages them to stay with you for renewals month-to-month or lease-to-lease.
Give very good communications about repairs and problems. If you’ll get a notice that says the water is going to be turned off in your building. don’t assume the tenants got it, too, even though the city sends it to everybody. Tell them, “Hey, I notice is going to be out. Make sure you take your showers early that morning.” Or if there is going to be construction work or something, let them know what’s going on, so they feel like a part of your business and not a collateral, just someone in the way.
This last idea comes from MrLandlord.com. I really like it. On the tenant’s anniversary, when they’re coming up for renewal say, “Happy anniversary. Pick an upgrade A, B, C, or D. It can be a new ceiling fan, a new dishwasher, carpet steam, cleaning, or maybe a new bathroom vanity.”
Those things are a lot of work like a I want to put in a new bathroom vanity. Well, think about it. If you’re encouraging long-term tenants, which you want to do, if they eventually leave, when they eventually leave, that apartment is going to need some work. It’s going to be dated. By encouraging them to pick the major capital improvement, you’re basically getting their permission to go in and make a lot of noise and dust and maybe even kick them out for a day or two while you keep your apartment updated. Similarly, if they’re coming up for renewal, you might consider if you’re going to operate the building for a long time and they’re stable and you like them, sign a lease for 2 years and offer a discount on rent, or sign a lease for 3 years and offer even greater discount on rent. Usually when you assume 1 year is the norm, but it doesn’t have to be. You can write a lease for longer and if they’re stable, they might take that.
All right, so I hope I’ve given a little food for thought for your business. We’ve talked about the purpose of marketing, product promotion, price, and process. We’ve talked about the sales funnel, how you make customers. We’ve talked about brand and little things you can do to build your brand. We’ve talked about bad marketing and good marketing, and I hope I gave you some ideas for your ad text. We’ve talked about a few websites. We’ve talked about playing the game of closing, which we should always do honestly and in compliance with the law, and then we talk about keeping our customers.
In the last maybe 5 minutes, I want to break on time, are there any questions for me? Is there any homework that I need to do to do more research, get back to you?
Rich: Who else was nervous about the black versus white thing up there [laughter]? It’s like where is this going, Doug [laughter]? By the way, I just want to point out I think you guys, has anybody ever attended any kind of seminar or paid-to-go see something like all day for anything, right? Okay, a lot of hands, right? Can we agree that Doug in 45 minutes just went through like more than you would learn in all day [applause]?
Rich: I filled this thing up. I’m supposed to write a recommendation. I filled it up front back with all the notes I took. By the way, I never knew that there were spam filters for putting exclamation points and stuff. My email, I mean my voicemail has a spam filter. Look where I got a voicemail from? What does it say?
Doug: Credit scam.
Rich: That’s their caller ID [laughter]. I don’t think they know that when they call me. So I guess real stuff, so to try to end on time, I’m going to shut up. Who has questions for Doug? Okay, we’ve got one back there. We’ve got one over here.
Male Audience 2: Hey, Doug, everything we always hear is, “be careful not to be prejudiced,” but when you were saying on your closing, you said, “I like you. I like to offer you $50 off,” couldn’t you come back to bite you in the butt?
Doug: Yeah, absolutely. The thing you want to do is you want to write down your intention to make that offer on the basis of economic qualifications. I’ve reviewed this person’s application and based on their high income-to-rent ratio, I’ve decided to offer discount of $100 a month, sign and date it. Make the offer. You’re good.
Rich: And you —
Doug: Guarantee, you’re good.
Rich: You could like even if you make a document on your computer or even email it to yourself, there is a time and a date on there if anybody really wanted to question you, right?
Doug: That’s true. I think really the best thing if you’re really worried about papers to print and sign and date and keep the original.
Doug: I tend to be very electronic too, Rich, but I would print, sign, and date. Just keep in mind you can be sued for anything. I’m just saying with that piece of paper, you’re going to be in the clear. You’re just going to have to defend yourself.
Female Audience 2: This is going to be quick. Can you discriminate based on smoking like if somebody is a smoker, you can say, “No, I don’t rent to smokers.”
Doug: Yes, yes. You can say, “I do not accept smokers. I’m so sorry.” The words I use to describe it are, “Look, when it’s winter and it’s minus 40 degrees for that one week, I know you promised to smoke outside the apartment, but it’s going to be too hard. You would be much happier renting from someone who allows smoking inside. I’m sorry.”
Female Audience 3: Quick question. I’ve always advertised on Craigslist and my son has informed me that there is now a fee for advertising on Craigslist.
Doug: It depends on the city. Yeah, there is a fee to post in New York. There may be in Boston now. I haven’t posted in Boston ever.
Female Audience 3: I’m talking Worcester.
Rich: No, no.
Female Audience 3: Okay.
Doug: I do not. If you are posting a job?
Female Audience 3: No.
Doug: Okay. Posting an apartment I believe is still free, based on the room’s response. I think it still ought to be free, but it might be in New York. It is in New York, San Francisco. They’re nonprofit. Just so you know Craigslist is the number 10 website in the world. It’s run like by a guy in his pajamas. He makes very little money and he charges just a few people for posting jobs and apartments in certain cities.
Male Audience 3: I post jobs on Craigslist.
Doug: Yeah, in Worcester I think you can post for free, yeah.
Male Audience 4: Boston is free.
Doug: Boston, too, yeah. Okay, very good. Thank you.
Female Audience 4: Springfield charges [unintelligible 0:40:45].
Rich: No [unintelligible 0:40:48].
Doug: Okay. Springfield charges $15 to post a job. Is there a question back here?
Rich: No, not really. But I wanted to come back here and impose myself on Brian because I think he does every single thing that you just went over in your presentation, and I wanted to see if I can just put him on the spot for a second to comment on something. Can I do that?
Brian: You just have [laughter]. Good job, Doug.
Doug: Thank you.
Brian: So what’s the question?
Rich: Wow! Never mind.
Brian: Doug, yes you can get Texas Roadhouse to put a coupon on the back of your business card.
Doug: Really? On the back of your card? That’s very neat. I didn’t know that.
Brian: You just said it.
Doug: I said you’d get coupons, but I didn’t know about on your card. Yeah, all right. Cool.
Brian: That’s awesome. Tenants love freebies? They’ll feel like you care about them, so if you find local florist, local coffee shop, Texas Roadhouse, McDonalds, if they are willing to give you something, take it and give it out. Other questions?
Brian: Thank you.
Doug: Okay, thanks, Brian. All right, well —
Rich: Is that it?
Doug: Right on time at 8:30. Thanks very much. I think you all have my cellphone. It’s everywhere. I make it easy to find. Call me if you have any questions. Thanks.
Rich: Let’s hear it for Doug Quattrochi [applause].