Leasing of the future

Through the 1990s, the Internet revolutionized how the world communicated and accessed information. While many speculated how this wide blue ocean might play out across a variety of business models, it was, yet, too distant a notion for the brick and mortar mindset of multihousing to have a strong impact. Who could have known that renters would change everything.

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Forward by Linda Hoffman
Back in the day, many tried to key in on the future of the Internet and its vast potential for advancing apartment ROI and operational margins. Most pioneers paid dearly with failed enterprises, abandoned Websites or Web portals whose time had simply not yet come.

But time heals all wounds, and with it, came advancement in Internet speed, bandwidth and functionality. Computer capability doubled every couple years and WiFi finally blew the doors off widespread Internet access with ease and

Oh, and let us not forget the kids. No one group did more to inject the use of the Internet into the multihousing industry than its student housing constituency. For it was here that residents and prospects led the charge by searching, applying, choosing apartments and leasing online without regard to industry standards or tradition.

The number of Americans across all age groups who searched online for a place to live in the last year has doubled since 2000. More than half of those within the 18 to 20 year old demographic found their next home online.

What is next? MySpace.com has more than 200 million users. According to one study, half of Americans between ages 12 and 17 belong to a social networking site. Facebook, which began linking college students in 2004, is now open to everyone and boasts more than 40 million members. Why is this important?

Take note of the recent rush by major Internet portals to buy advertising companies and extend their sales networks. The day of the one-page-serves-all for information and entertainment is fading fast.

Gone are the days of emphasizing strategies to attract and keep visitors–the way television networks have long operated– by creating destinations with anything people might need for work, leisure or companionship.

Instead, companies are following Web surfers and bringing the advertising to them.

The population is increasingly turning to blogs, social networking sites and other sources of user-generated media. As such, Google, Yahoo, Microsoft and Time Warner’s AOL have spent more than $10 billion collectively this year to acquire companies and technologies that help extend their online ad networks.

Instead of relying solely on being consumer portals, the major companies are creating single entry points for advertisers, who want to buy ads centrally, but spread them across a span of locations that follow viewers.

“We’re not interested in building yesterday’s portal,” said Ron Grant, AOL’s president and COO. “Consumers are finding what they are looking for is coming from more and more fragmented places. We need a way for advertisers to take advantage of that fragmentation.”

So here we stand at the threshold of yet another turn in this fast- paced, ever-changing world of Internet marketing. How can multihousing owners and operators ever hope to stay at the front of this unfolding, ever-moving target?

My friend Tony Robbins (international motivational speaker and author) has the classic lead-in line to this question. Stepping into our deepest, most Tony-like impersonation, we frequently chant it around the shop here as it lies at the heart of all good strategy. And it goes: “I have spent my life studying the most successful people and I’m about to take what I’ve learned and share it with you.”

It is that simple. Think of the most successful people you know. Study them carefully. Follow their lead. By doing this, you skip the trial and error, and reap a faster, tried-and-true result, raising your company and operations to the greatest level of success possible with the shortest ramp up. And that my friends, is what I offer you today.

Multihousing Professional magazine is teaming with two rather successful people–Steve Lefkovits and Mike Mueller–to present a power forum on Internet marketing called AIM (Apartment Internet Marketing). While this is the third year of this extremely successful event, Steve and the magazine have taken the lead position in orchestrating the event, carving out useful content and lining up speakers.

AIM’s founder, Mike Mueller, is stepping away from the command post, but his mark remains. Mike was a partner in the Internet marketing firm that is today, Move.com, and went on to form Vaultware, online leasing software for apartments.

Steve Lefkovits, the conference’s new executive producer, pioneered the National Multi Housing Council’s first Apartment Technology Conference in 1997. Now in its tenth year, the annual event is attended by over 700 executives across the country. An industry veteran, Steve has also served as a senior VP for technology initiatives for BRE Properties and as NMHC VP for finance and technology. Steve’s capital markets background is rooted in his time with Prudential Securities and the New York State Housing Finance Agency. If that isn’t enough, he has a master’s degree from Princeton and did his undergraduate in economics at Yale.

I am proud to welcome Steve to the team, and invite you to read on. He provides key insight into emerging Internet marketing tools and strategies from a perspective that sits squarely in the chair of today’s multihousing owners and operators.

Advancements in online leasing and marketing by Steve Lefkovits
I am very excited about some of the new trends in multifamily technology. We have dreamed about online leasing with electronic signatures for years and it is here. Transparency into ad spending is available from multiple sources. Integrated Web-based applications that talk to each other are here. Hotel-style revenue management is one of the fastest-growing areas of resident customer management, matched only by the pace of companies adopting the convenience of check-free online payments. For executives, the marketing and leasing process are fun again.

Where’s the party? Technology driving revenue and the leasing process
Online leasing
Since 1999, when Amazon.com sent shock waves through retail, industry observers have been pontificating about letting renters transact online to find, apply for and close a lease document. And then pay their rent electronically. They (well… I) insisted that demographic trends would demand that the industry adapt to the convenience of online transactions. The day has finally come that a reputable company has stepped forward with an end-to-end leasing workflow that can be executed all online–even an e-signature. No more printing out forms and signing with a pen. A legally valid lease can be executed electronically and is available today from RealPage. And it can even be saved and secured in a tamper-proof electronic document management library that can be preserved a lot simpler than the file cabinets in the office.

Adoption of social networking as a business tool
Increasingly, smart marketing professionals are using sites such as YouTube, Flickr, Facebook, GoogleBase and other social networking sites to market apartments. Many web browser software clients have search boxes that allow users to select the database that gets searched first–apartment hunters don’t necessarily search on Google for an apartment first. They might search first in the network they use the most–both for convenience, and familiarity. Companies that have created content suitable for these sites have been rewarded in driving direct leads, and from the search engine optimization benefits of having an apartment community site directly linked from a Top 10 web destination. Have you searched on YouTube for apartments in a major metro? What you see might surprise you.

Market data mashups
In addition to the two largest revenue management providers, a number of smaller companies are using Web 2.0 technology to provide quick market information and real-time offer pricing. At their most basic, these are “mashups” or garage-band integrations of data overlaid on a Google map. But with geographic search capabilities that drill down into the zip code, they are a cost-effective competitor to more established, slower market research, and also to more intensive revenue management packages that provide more functionality. If you have seen RentSlicer.com before, prepare to be blown away by the potential of Padzing, a new real-time market information product from the folks at Realty Data Trust, makers of VaultWare.

Specialized inbound call centers
This same revenue focus applies to inbound sales call centers. First-in-line users of Level One’s call center are astonished at the difference in quality that a dedicated, highly-trained call center team can do for increasing prospect interest, setting more appointments and even signing leases sight unseen. A call center is more than technology though, it is the improvement of an existing workflow due to specialization. By concentrating the task for a portfolio under one roof, and bringing in specialists to do it who are compensated just on metrics relating to that activity, the call center takes the performance of phone sales to new heights. This type of specialization may well prove to be the future of apartment management–integrated specialists connected by information who don’t have to know each other’s jobs–or wear 30 different hats during the week.

Prospect lead management
It used to be common for leasing staffs to scoff at the web-generated leads that came in as faxed guest cards. Some offices even placed a waste basket under the output tray for inbound faxes from the Internet. Owners cringed at the wasted ad buying, and the lost leads. In response, several companies like Lead to Lease, CallSource, Lead Tracking Solutions and others have rolled out robust lead management tools that announce, track, escalate and tabulate leads delivered, and some even have intelligent auto-response capabilities that have to be seen to be believed. These tools aren’t just management aids, they are teaching tools that give instant feedback and encourage self-improvement.

Online payments
I once had a consulting client whose property managers believed that their primary purpose was to collect the rent and kibitz with residents in their monthly pilgrimage to drop off their checks. I now wonder what they think about PropertyBridge, Property Solutions and RealPage bringing the convenience of recurring online rental payments to the industry–and the rapid adoption of that convenience by residents. Judging by how quickly residents have embraced electronic rental payments, I’d say my former client’s property managers will soon find their jobs changing. This rapid growth and adoption is confirmed by Moneygram’s recent purchase of three year-old startup PropertyBridge for more than $10 million.

How do I learn about this stuff?
How does all of this technology–marketing, leasing, pricing and payments–work together? One great opportunity to learn and meet everyone you need to meet in these areas is at the upcoming Apartment Internet Marketing Conference (AIM) April 23-25, 2008, in Scottsdale, Arizona. It will be fun, but also a unique opportunity to shorten the learning cycle and get up to speed on all of the technology systems that can make easier online marketing, pricing, leasing and paying. The conference is expanded from last year but is still just for employees and principals of firms that own and manage apartments, and selected best-of-breed vendors who are sponsors. It will be the primary event of the year for marketing, operations, IT and asset management executives to focus just on revenue generation. More information and registration is available at www.p08.com.

Author: Steve Lefkovits with forward by Linda Hoffman