When looking to ‘turn around’ distressed properties or when seeking properties with potential upside, many real estate investors will analyze the rent differentials in the market, evaluate what upgrades they should do to the units and the associated costs, and think about how to re-brand the property through a new name, signage, and color scheme.  But they are missing one of the best ways you can add value to a property today – through enhancing the resident experience.

Today, operating rental apartments is about more than providing a nice place to live.  The extra ‘alpha’ is in the experience.  Many retailers have learned the hard way that just having a quality product is no longer enough.  Brand loyalty is earned through the customer having consistent positive experiences in their interactions with the company and its staff.  Your property is no different.  Your goal is to create positive emotions through the resident experiences and interactions at your property.  

Think ‘Behind the Scene’

Real estate operators need to think beyond the quality and aesthetics of the physical property and reach their audience at an emotional level.  Think about your own experiences staying at a high end hotel or, even better, at a place like Disneyland.  Most people don’t realize that, behind the scenes, their experiences are being carefully studied and analyzed.  How you interact with the rides, the restaurants, and even the gift shops are all then re-designed to create a more immersive experience to engage and retain customers.

Now it’s time to think about the experiences at your property.

  • What is the customer experience at the leasing office?  How can you improve that?  Perhaps you can lay out the space so it has areas where the agent and resident can sit in a relaxed setting that facilitates conversation and builds connection – not just make them sit at a desk to ‘handle business’.
  • What is your residents’ experience with maintenance issues?  How easy is it to schedule repairs at a time that is convenient for them?  Are they kept informed of the status of their work orders?  How can you improve this experience?
  • Have you communicated to your staff the type of experience you are trying to create at your property and how you expect them to fulfill those expectations?  When you go to your favorite restaurant and order the same dish, you expect it to come out the same way.  You need to clearly set this type of standard with how staff interacts with the residents.

Think Through the Customer Experience

When you think about what they do at Disneyland, they are carefully scripting everything to improve your experience.  For example, theme parks have always had long lines at the most popular rides.  But Disney created ways to make that tedious experience a little better.  Making the line part of the ride was one way.  Whether it is reading the humorous tombstones outside the haunted mansion or walking through the caves at the Raiders of the Lost Ark ride, these little diversions helped make the wait not seem as bad.  Adding Fast Passes was another innovation to make the experience better.  You can do the same thing.

The key is to think more customer centric.  What policies do you have that might be company friendly but customer inconvenient (like office hours that end just as residents are getting home from work).  In an increasingly competitive environment, shifting from a ‘bricks and mortar’ focus toward improving the resident experience will enhance returns.  Your residents will stay longer and your NOI will improve.

The Opportunity

Many new Class A properties are creating a high end feel with their infinity pools on the roof, and other resort-like amenities.  They may have dog grooming stations and yoga studios.  But most of us do not have those things.  Nor do we have to spend for them.  We can capture loyalty through creating more customer-centric experiences.  Think hospitality.  Think entertainment.  But mostly, try to delight your customers in some way.

I believe focusing on the rental experience is the great opportunity for Class B properties to differentiate themselves and add value in this market.