Concessions and Other Superfluous Floating Devices
When I taught my kids to swim, I refused to use water wings. I thought, “Why teach them that they need floaties in order to swim? They actually slow down the learning process.” My children learned how to swim quickly and are strong and confident in the water. They are also fearless!
The same holds true for leasing apartments with concessions. The practice of discounting has become so ingrained in the leasing culture that it’s like wearing floaties in the pool: they inhibit the achievement of full leasing potential.
I’ve written before about how concessions are unnecessary if you’re using revenue management technology like YieldStar®. I’ve had the opportunity to train both veteran leasing associates as well as those who are completely new to multifamily. Once people are used to leveraging concessions to sell, it can be a challenge to move them to effective pricing. For the newcomers, effective pricing just makes sense.
Scott Morrison, Senior Vice President at Legacy Partners, and a YieldStar client shared a story with me recently about a new leasing associate he hired with no prior property management experience. He started using YieldStar revenue management right out of the gate. Here’s Scott:
This leasing associate had no preconceived notions about how to lease apartments, and was a rock star without relying on concessions. The reality is that it’s actually harder to swim with floaties than without. You too can be liberated from concessions!
Nothing beats experience, but to quote the American inventor Charles F. Kettering, “It’s amazing what ordinary people can do if they set out without preconceived notions.”
Please share your thoughts in the comments below.