Break the Concession Cycle with Revenue Management
Using concessions is simply not necessary with YieldStar. Leasing, retention, and (most importantly) revenues improve dramatically when concessions are eliminated, even in markets where concessions are still prevalent.
Renters today are highly price sensitive. Competition to attract and retain residents remains significant. For years, we have trained our renters to expect concessions when shopping for apartments. However, properties using revenue management have found that today’s renters aren’t attracted to the “special” anymore. They prefer to write a check each month for the lowest amount possible. Companies using revenue management solutions from YieldStar are “training” renters to expect net effect pricing.
YieldStar empowers leasing teams with a multitude of revenue neutral pricing options for every available unit every day, that are designed to meet renters needs. Leasing associates have the flexibility to accommodate a nearly unlimited combination of move-in date and lease term options (within reason, of course, and configured by owners for each property) without requesting permission from anyone.
For example, if a prospect wants to hold a unit for three weeks, stay for five months, and pay $800, the price may be $900 for that exact request. In this case, the leasing agent would independently review the pricing options available for different move-in dates and lease terms and would work to have the prospect move in sooner, stay longer, or expire in a more favorable month to achieve the desired price of $800. In the end, upon arriving at the desired price, the prospect feels they have been party to a negotiation and have received a concession, simply because the price was reduced. In reality, there was no concession and the revenue result for the property was the same.
Owners and managers not using YieldStar revenue management have to rely on concessions to remain competitive in today’s market conditions, since they don’t have the flexible pricing options to rely on as a negotiating tool. Leasing teams need tools to use in order to close opportunities, and without revenue management from YieldStar, concessions are the industry’s prevailing method.
And unfortunately, even with concessions, properties not using YieldStar for revenue management are still hamstrung in that they can’t accommodate renter needs with the same flexibility. Restrictions have to be imposed on lease terms and options because leasing associates can’t possibly calculate every possible combination of options on the fly.
And what do earlier move-ins, more favorable lease terms, and automated expiration management do for the owner or investor? It increases asset utilization by reducing vacancy as well as turn and carry costs. Hence, driving more revenue.
Have you broken the concession cycle? How are you using YieldStar to offer flexible pricing?