Concessions in Multifamily: When to Offer Them and How to Use Them Wisely

00:00 – T Tran

Do you guys feel like there’s a difference between a move-in special and a concession?Pretty strong concessions coming into the market.What is happening?Why are we seeing this right now?

00:09 – Chris Foti

Depending on your market, there’s going to be a number of reasons why you’re going to see concessions.And that’s why I like to call it two different things, right?To renters, it’s move-in specials.On our end, it’s concessions.

00:19 – Skyler Vanderwell

More established communities are obviously doing less of the concessions.Let’s use them where they are effective.And for me personally, we are.

00:32 – T Tran

Hey guys, welcome to Multifamily Manager Pro.T, Chris, and Skylar here with you today.Do you guys know what I did yesterday?I found these great booths on sale.I know you actually don’t care, but the reason I’m saying this is because it made me think of the different deals that we’re seeing out in the market right now.So I got these great like $160 booths for like $80.And I’m like, yeah, I feel really, really good about this.Is it something I really needed?Probably.No, yes, I did.I needed them for sure.I needed them.But my point is I was thinking like, man, we were talking about some of our move-in specials.I thought to myself, do people feel that good about the move-in specials or concessions that we’re giving?Like as good as I felt about my boots.

01:11 – Chris Foti

Right.So that works like in that sort of setting, right?But does that work in housing?Right.And so I think that’s part of what we’re going to be talking about today.

01:19 – T Tran

Yeah, for sure.So I think first off, do you guys feel like there’s a difference between a move-in special and a concession.

01:25 – Skyler Vanderwell

I don’t.I see a concession as a move-in special.Honestly, I think the terms are interchangeable, right?It’s a synonym of itself, essentially.It means the same thing, I guess, to certain people as far as a move-in special.I think that would be geared more towards, obviously, the potential resident, whereas a concession would be more of an industry term.

01:46 – T Tran

I agree with that.I think it’s who is your audience, right?When we’re talking to our peers, we’re talking about concessions.When you’re talking to your tenant, or lead, I should say, then you’re talking about whatever the specials are, right?That’s, you hear that lingo in restaurants, you hear that stores, sales, things like that.I do think that you guys are kind of saying the same thing, which is it’s an interchangeable term.What are we seeing out there right now?Because I will say that in our area, I think we’re seeing and we have been seeing since I want to say the last half of 2024, pretty strong concessions coming into the market.Do you guys feel like that’s appropriate?Like what is happening?Why are we seeing this right now?

02:25 – Chris Foti

Yeah, I think depending on your market, there’s going to be a number of reasons or depending on the community, why you’re going to see concessions.It can range anything from a brand new property opening up and going through a lease up and therefore they have put concessions in place to help get stabilized.But I think a lot of what we’re feeling in our market and a lot of other markets as well are feeling is that there is a lot of inventory.And I think TU could probably speak to this a little bit better with all of the construction delays during COVID.It’s really created a market where there’s more inventory than there is renters.And so everybody’s kind of struggling.There’s a lot of things going on with that in the background from the developer and investor and lender standpoint as well.And they have specific numbers that they’re looking to hit.I know we’re going to go into how the concessions kind of help them hit that number.But depending on the project or the community, there’s multiple reasons why we can have concessions.And one of the main ones we always go back to is when we’re leasing, right?But T, I mean, you could speak a little bit to why I think we’ve seen such an increase in concessions in our area and a lot of other areas due to construction and delays and things like that.

03:27 – T Tran

Yeah.I mean, it’s the same story I would say across the country.And it’s one of those sad COVID stories, right?Right.Because obviously we had supply chain issues in our area in particular, northern Nevada.We had several projects coming online and they definitely all were on a different timeline.But with the supply chain issues and just the financing picture just being shaken because of the pandemic, everyone kind of stopped, got stalled.And then we all restarted at the same time.Instead of phasing out new properties, we’re all kind of bunched up.Everyone’s trying to hurry up figure out their financing, and doing all this stuff, and then all of a sudden we’re all launching at the same time in the market; not the best, and I know that we’re not alone in that, that we saw that happening all throughout the Sunbelt in the Midwest, everywhere.I mean, this is just what the story was, this oversupply issue.I think is where we are; we’re going to start talking about absorption and things like that, and I think that’s a good a topic on its own-the absorption rate, and how we see that coming through.Now it made sense to all of a sudden see, ‘wait a minute, we’ve got too much going on in the market right now.’And now we’ve all got to figure out a way to make our deal better because there’s a lot to shop for now.There’s plenty of inventory.So it sounds like it’s flipped a little bit.I think this is now the buyer’s market; there’s just more to choose from.

04:46 – Chris Foti

There is.

04:46 – T Tran

Who’s got the best deal.

04:47 – Chris Foti

And to that point, I think that is kind of for a lot of property management companies when it comes to sale, that’s going to be a lot of times their biggest tool or their biggest thing that they can adjust to change their deal and make their deal more attractive to people that are looking at housing.Having a lot of inventory, it’s created some issues, especially when you look at like your clients, the developers, the investors, who have invested in these projects.At the time when they were underwriting them, they had a certain NOI or a certain revenue that they projected to hit.And a lot of times when we see how these concessions have gotten more and more aggressive over the last couple of years, it’s because they want to still be able to show a certain gross potential rent, right?Because they don’t want to change the actual rents that they are putting on the books, but instead they want to have a concession that will either burn off or come lease renewal, they’ll have to figure something out.But by having a concession upfront, they can still get the rent that they set out to get, or at least said that they would get.And so it’s a tricky thing.And I think in the past, concessions were used just regularly, right?It was just get a half a month free or get a month free.It was just a really regular sales thing, but we’ve definitely seen it get a lot more aggressive.And I think we’ll-get into the pros and cons of some of that.We’ve seen anywhere from one month free, two months free.We’ve even seen some three months free.That’s not something that’s normal to me.I mean, T, you’ve been doing this a long time.Have you seen a lot of three months free?And Skyler, you’ve been out there.You’re constantly shopping the different communities.Do you see a lot of three months free?

06:09 – Skyler Vanderwell

So I’ve seen it here and there.It has to do with a few different outlying factors, right?Like how new is this community?Is this a lease up?Is this an existing community?This is a completely separate topic of itself would be the absorption.But in terms of that, what I’m seeing is more established communities are obviously doing lesser of the concessions possibly the one or two month because obviously their goal is the stabilization of a community that is already consistently stabilized versus a new project and a lease up where I feel we’re finding some of those larger concessions all the way up to the three month possibly some gift card incentives.I do feel that some of it is dependent upon the area, the size of the project, and then how new is the project?We are seeing quite a bit as far as concessions go, and how do we see these ultimately affecting our communities?Do we see this as something that is positive in terms of being effective in driving in that traffic to increase occupancy?What are some of the draws to that as well?

07:13 – T Tran

You raise a really good question about these concessions specials, right?Because are we talking about a stabilized property that’s been online for three to five years?Or are we talking about a brand new property that’s just launching onto the market?They’re very different strategies and the goals are going to be really different.Even within that, if we’re talking about a brand new launch, are we trying to get occupancy as quickly as possible?Most of the time, yes.But I will say that the financing picture is very different right now.We have lenders who are saying, you know what, we don’t really care about the speed of which you hit what they would consider stable.They want to know, are you going to be able to hit the rents?That were written in a pro forma.The goals are different depending on what your financing picture looks like.And then that’s going to dictate what kind of specials are you guys running.If the goal is.Okay, we’ve got to try and get the highest number possible of actual rents.We’ve got to be really creative.What do you guys see out there for concessions aside from rent?

08:20 – Chris Foti

Yeah, well, I think that’s a good point.Just to touch on what you said, I totally agree.There are two different buckets when it comes to concessions.You have your stabilized concessions and then you have your lease-up concessions.Concessions is something that we look at just to kind of gauge how a property is performing.Like they’ll tell us a lot.Oftentimes we’ll look at our competitors’concessions and see how they’re moving.I think that tells us a lot about how they’re doing on their sales and their leasing.Basically, there are different ways to provide benefits to somebody wanting to move into your community.One of them is a concession or a move-in special.Another one would be something like a look-in lease.There’s all kinds of creative resident gifts and rewards and types of things that can be looked at.So those are the kind of things that I see, right?Concessions, giveaways, gifts, things like that.

09:02 – T Tran

I mean, Skylar, at one point, I remember we were working on a lease up pretty aggressively.This particular property right by the river.Like you see the river from the front door of the property, which is really, really cool.We were talking about one time, what were we doing?But we were like, let’s give people a kayak because they have like a kayaking trail and things like that because we were trying to be really aggressive.But in reality, I mean, Skylar, when you’re on the ground, what do you see actually works?Do you see that people want a kayak or do they want a gift card or do they want it off the rent?Do you see a trend?Like, how do you feel about that?

09:35 – Skyler Vanderwell

I think it kind of plays into one’s own interest.Some people are definitely, hey, what else are you going to throw in there?You’re going to throw in a coupon.You’re going to give me a kayak.You’re going to do this, that.We do persistently get questions as far as, you know, what kind of specials are you running and things like that.At the end of the day, it ultimately comes to, is this a community that this individual is interested in?What are their reasonings for being interested in the community?Because ultimately, that concept.Is not what you’re living in, right?You’re living on property; you’re living within the unit.We’re seeing a lot more as far as the concern over what can I afford.I see a lot of these concession questions as a secondary and I feel like a lot of these potential residents and these leads that are coming in it is a secondary question for them, and I think part of that is the atmosphere that has been created in the marketplace as far as concessions now it’s just commonplace for potential residents to ask, ‘Hey, what kind of specials are you running?’I don’t necessarily feel that it’s out of interest of what the special actually is.And I don’t, just as far as me personally, like, yes, that can be an incentive to want to live on that property, but ultimately, how the property presents, how it fits within their budget, things of that nature is ultimately what’s going to lead to them converting over from a potential resident, from a lead into an actual resident.It’s their want and willingness to live on the property.I feel that these concessions, some of these specials, and stuff like that, while they are enticing and could possibly be the thing that sets apart from wanting to live in one community versus the other.Having that little spiff, these guys are more community-driven and budget-driven in terms of what they would like to live in.How do you see that, Fody?I mean, that’s just my boots-on-the-ground personal opinion.I’m not sure how you guys would feel in terms of how you’re seeing it on your end.

11:33 – Chris Foti

I like that that’s your perspective being on the ground.The way that you look at it is, ‘The concession shouldn’t be what makes them determine that that’s the place that they want to live at.’I think.The position that a lot of properties have gotten themselves in, the condition of the market and the concessions that are being offered right now has kind of complicated some things.And unfortunately, I do think that there are some renters out there who are making decisions based on what they’ll save or how many months free that they’ll get with moving.I know we talked a little bit about this in a previous episode, but if you look at moving into a new apartment with two months free, you are essentially cutting your annual rent costs down by 17%.So it’s made things harder to retain residents, but I also think if you have those residents that are coming to the community and wanting to rent solely because of the concession, I think that presents a problem.I don’t think that’s why people should be selecting the communities that we manage, and I think you need to be careful if that’s why people are selecting the community.And I do think that’s one of the problems that we’re seeing probably in every market, but at least I see it in our market where really the only thing that we’re seeing people be aggressive with is their concessions.I mean a lot of people aren’t looking towards different marketing channels or marketing strategies.That is the one lever that they can pull.Every week, it’s a different concession-it’s six weeks this week.Next week, it’s eight weeks as a concession.And so if that’s the only thing that you can kind of change, I think you’re limiting yourself.And I think, yeah, attracting people that are only looking at the concession, you have to really look at the quality of that traffic and how that can affect things.And then on top of that, you have to look into the next year, right?Is this the type of person, if they’re willing to move in just because of a concession, are they going to stay with you the following year when another property is offering you know another two months concession?So is this a good long-term deal?Are you going to be turning that unit again in another 12 months because they selected it just because of the discount?It’s a weird environment.People are shopping for housing with coupons, that is not really what we want when it comes to housing.We want people to live at the community because they love something about the community.

13:29 – Skyler Vanderwell

Kind of brings up an interesting question too: like how is this concession market going to affect retention?Just because we have the ability to fill the building, uh…What was it, the concession that drove these people in there?And if we continue to operate in a concession market, is that what is going to take current residents away from properties or bring them to properties, right?Because again, if we’re solely basing our concession as one of the main determining factors in capturing these leads and capturing these potential residents, I mean, how does that look long-term?Not good.

14:06 – Chris Foti

Not good. Not good.I mean, we saw the other day, we saw a property that was offering a three-month concession.Now, if you think about what that means, because you have to look at what it means to us as managers, what it means to the owners of the communities and what it means to the renter.And if you look at a three-month free, that is 25% of their annual rent expense eliminated.That’s a huge draw.It’s definitely going to affect retention, right?And so it’s even more important for us to do things that go above and beyond to retain.That will persuade them to want to stay with us when they see like a savings going to a new community.And on top of that, a lot of the new communities that have been popping up in our area are new Class A communities with all the amenities.But in addition to that, you’re getting a bunch of free rent up front.That presents another problem though when they come for renewal.And I’ve actually toured a couple of some really nice properties, looked through them.They were great.They offered the concession.It was two months’free.And I asked the leasing agent, ‘Well, what happens next year?’Because that’s a- completely different deal, right?Because the rent’s so different.And they said, well, just come see me and we can talk about concessions at that point too.So you’re creating like this situation where it’s like this never-ending concession process instead of, in my mind, presenting a price or a value that makes sense for the community and selling your community in a way that draws those types of people to live at your community.And I get it.A lot of people are stuck.They’ve projected rent a certain way, but I think that creates a really tough situation that kind of sets people up for failure.One of the areas it’s hard for me to understand is I know lenders have certain requirements that they need you to meet when you’ve signed on a loan and you’ve projected things a certain way, but ultimately to say, well, keep the same GPR, but attract a lower quality resident and write off all this free rent.I think.Is not the right strategy.

15:49 – T Tran

And we’ve seen that go bad.We’ve seen some properties go into basically a distressed state and have to offload because they couldn’t refinance into permanent financing.This is kind of a danger zone.And again, that’s a really in-depth discussion when we talk about our GPR, gross potential rents, what lenders are looking for, and those kinds of qualifications.Great points, guys, because it’s a lot.It’s very involved, right?So you guys, I think, have presented these great arguments about why concessions are important, how you can use them as a sales tool.But also we’re kind of getting into the slippery slope.Are we now kind of devaluing the product just right off the bat, especially when some of these guys are really aggressive with these three-month concessions?That one shocked me.I don’t recall in my career seeing three-month concessions right off the bat.And I worked through the recession and all that good stuff.And that was hard.And what this feels like to me, 2025, and you guys will hear me say this couple of our shows.I’ve said this previously and I’ll say it again.2025 is going to be a year of stabilization in some way, shape or form.There has to be a normalization of the market.We’re going to have absorption.We don’t see as many construction permits coming on because we’ve got to get through this supply.And it’s funny because it depends on where you are in the country, right?I mean, we have an issue right now where we’re seeing these really large concessions because we do need to absorb supply.In New York, it’s an opposite problem.They don’t have enough inventory.So you’re going to have different issues, obviously, in different regions of the country.But for what we’re seeing personally right now, we have fewer units coming online this year.So I think we’re going to see that these concessions are going to pull back because as we get through the supply, it makes sense, right?It’s your classics, supply and demand.The thing that I always worry about is the devaluing.And it is a perception.And perception is truth, right?What people perceive is their truth.We’re putting out these great class A properties, but by discounting right off the bat, doesn’t it not kind of make you stop and go, ‘Well, what’s wrong?’Or am I actually really getting this great deal on these boots?I don’t know.

17:56 – Chris Foti

It should make you think that way.And that’s why I like why we call it two different things, right?To renters, it’s movement specials.And to us on our end, it’s concessions, right?At least for me, that word, if you look at that word to concede, right?You’re basically saying that something is true or valid after denying.You’re basically admitting that the community is not worth what you were saying that it’s worth.That’s why I like looking at it that way.Concession is really a negative thing for us, but it’s a very positive thing for the renters.If you don’t know, a concession shows up in the revenue section.It’s not an expense.You’ll see your rent income, right?And then it’s a negative revenue item.So it’s immediately going to deduct that off of your revenue before you even start looking at expenses.It’s treated a little differently than something like a look and lease or a gift.You know, those are going to show up in expenses, but a concession is going to deduct right off of your revenue.Sometimes it doesn’t make a lot of sense to me.Like if lenders are looking at.GPR is net effective rent.Is that not something that is important to them?To me, that seems like a more true or accurate number to kind of go off of.

18:55 – T Tran

Because we’ve played with moving specials quite a bit.We’re trying to figure out what makes sense.You saw everybody going, oh, we’re going to give two months free, just two months free rent.Like, okay, cool.Based on what you were giving us on feedback, it was, can I spread that across?My lease term.So there was a different play with the numbers there.We were talking about what is your effective rent versus what we were marketing the rent for, market and effective rent, two different things that we’re talking about, different ways to play around with the numbers.Some properties have the flexibility to do that because as Foti points out, how does it look on the books?Where do we need to see the revenue and expenses?And how does that affect your bottom line?What’s the picture that we’re trying to paint when it comes to ownership and the lending situation?Because there are different pictures, and when you use effective rents and kind of play with these concessions differently, it can change the narrative for someone maybe trying to get into some permanent financing and things like that on these properties.So do you find that right now people are looking more into this effective rent, this long-term advertised savings?What are we seeing there?

20:05 – Skyler Vanderwell

That’s an interesting point that you brought up.As far as the marketing and the resident aspect of it, it is a little more no-nonsense, right?Within your ownership team, you do have the ability to make it an effective rent as opposed to the market rent that I’m finding as far as driving lead traffic and things like that is more advantageous.And the reason for that being is, is because, as Foti mentioned, we are not conceding that there was something wrong and that we’re using concession to remedy that, right?Long have gone the days of used car salespeople, right?These ways of negotiating are definitely going to the wayside.I personally, like that, is kind of the concession market, right?Is that we’re using this as a way.To get a yes answer and to the financing portion of it, how is this any different operating on on these one, two, three month concessions?Any different than actually facilitating a difference in the market and the effective rent?All you’re doing is just adjusting these numbers; you’re still out right.And you get more questions when when we were doing the one, two-month specials, things of that nature, the question would come up on a regular basis: ‘Hey, can we spread this over the duration of the lease?’I’m fine things like concessions; they can be effective, but I feel that their overuse currently in the market is doing just that-we are unintentionally devaluing our properties when we need to spend more time looking at, hey, here’s where we would like to see our market rents and this is where we projected our market rents to be at, but let’s be realistic about what the actual effective rents are.It is kind of interesting, but as you had mentioned, when you’re shopping and things like that, to where you go in and you’re like, ‘Well, what happens at the end of my lease?’And it’s like, ‘Oh, come talk to us.’I’m like, that kind of feelsA little sly, right as a consumer, doesn’t that not kind of give you just a little bit of the itch?You’re like, ‘Wait, so now I gotta say like again in an auto dealership.Well, this is my number and then this is my number, right.’I feel a lot more people are looking for that transparency in the sales aspect of it, so I feel while concessions can be super effective, there’s a time and a place just currently in our market in our situation it is getting a little overkill to where we all need to sit and actively amongst each other and agree that like, ‘Hey, is this the best path moving forward for the stabilization of new properties or existing properties

22:25 – Chris Foti

And I don’t know maybe you guys can speak a little more to that in terms of financing aspect of it getting into more permanent financing from bridge loans, it is a numbers game, it’s an interesting tactic that I just don’t think people are vibing with being a property manager looking at different properties that we could potentially take on if we’re looking at a property and I guess the strategy or the only strategy we have available to us is we need to get a certain rent, but all we really have that we can adjust is the concession.I think that’s a huge red flag to me because that doesn’t give us a lot of flexibility in a business where flexibility I feel like is required.Real estate markets go up and down.Inventory goes up and down.And so rents need to at least have some flexibility.I think when our only thing that we can adjust is the coupon that we’re offering, it doesn’t It doesn’t renew.I wouldn’t want to operate a project where it’s every year you’re getting a concession.But if that’s the only thing that you’ve got to kind of adjust, at least for me as a manager, that would be a red flag to me.You’re kind of being set up to be either in a really challenging place or a project that could not do so well because you don’t have any flexibility.Real estate is something that changes and moves.Your offer needs to be able to do the same and it can’t just all rely on the concession.

23:36 – T Tran

You guys bring up a great point because these concessions, it’s important to use them wisely.It’s a tool.Sure.But again, with not only just the devaluing of the product, you’ve got to look at the tenant quality as well, right?Because you definitely have people who are shopping around right now because they know they’re going to get some sort of deal.And I think that when everyone’s doing the same deal, A, how are you differentiating yourself then?If everyone’s doing a two-month concession, how do you stand out as a property?And B, what kind of tenant are you looking at at that point?Because if all they care about up front is the deal and they’re not married into the community, like you said, Skylar, you know, they’re not really paying attention to the actual, where are they living?Does it work for them?Does the area work for them?They’re just looking for the deal.I mean, we’ve seen that happen, right?Where all of a sudden you kind of get this little washout because you’ve had all these tenants now that leave.You’re losing your retention because the deal is over and they’re going to just jump to the next one that’s giving whatever deal.So, I mean, I think that these are obviously tools, but they just have to be used very wisely.

24:45 – Chris Foti

So, I think that’s a good point.It’s how you use the concession is going to determine your success with it.And it goes back to, is this a stabilized property?Is this a lease up?But how you use that concession.Speaking from experience, our team actually has taken over a project that was in a lease up where concessions were used very, very aggressively.And I think when we took over the project, we were supposed to only have to get a few more leases for it to be occupied.But because of the concessions and the low-quality residents or applicants, process that was put in place, these people took advantage of the concessions and the concessions even included things like providing concessions on security deposits and things like that.How you use that concession, those 10 leases we had to get turned into like 50 because of the quality.I wouldn’t even say the quality of residents, but the quality of sales process and qualification process, what you’re tracking and what you’re putting into the community, because you’re saying is we’re going to give you this free.We’re going to give you this free.You don’t have to pay anything to move in.And again, that creates an environment where I think you’re kind of asking for trouble.

25:44 – Skyler Vanderwell

Now, I don’t think people are looking at the hidden costs in that, right?Because I mean, a resident retention is important for.Generating more revenue is it advantageous to give two three months free on a concession knowing full well that after the duration of that lease these people are going to vacate?You’re looking at maintenance costs now, you’re looking at turning the unit, you’re looking at these unforeseen costs because you’re lacking the resident retention-it’s that yo-yo effect right where you only had a few leases to fill and because you offered that concession and you continue to offer that concession well I’ve already burned up my concession.It’s like why would I continue?I need to stay here and go.And my lease is now going up a couple hundred dollars towards the market rent versus what was essentially, I guess you would call it, quote unquote, the effective rent when you did have the concession.Those are things that you have to look at.There’s a time and a place to utilize these, but it does devalue in some way your community because you want to see those renewals.You want to see a certain level of retention.You want to see that stabilization in the community.And I feel that overdoing it in the concession market, it’s going to take longer for us in certain marketplaces to actually stabilize these properties.

26:57 – T Tran

Of course, Fadi, you have to bring up that project.I have like PTSD for that.So I’m like, I hear it too.And I was like, no.Do you have to talk about that?

27:06 – Chris Foti

Wait, you guys didn’t like that?The project was so much fun.

27:09 – T Tran

That one hurts me on a different level.I start freezing up.I’m like, oh man.

27:18 – Chris Foti

I mean, I’ll also just say that I’m not a huge fan of these aggressive concessions.I understand there is a place in our industry for concessions.I don’t have a big problem with half a month free, a month free.I think there’s a way that we use them strategically.And as things got more aggressive in our industry on these concessions, and even some of the owners that we work with, they’re kind of direct. ‘Hey, this concession and that concession.’But when we look at it as kind of a strategy, I think for us, we came up with a strategy.I think that worked a lot better.The concessions aren’t the focal point of our marketing.That’s not why we want you to come, you know, take a showing in our property.That’s something that I think for us, at least to get the most out of it, we like for our leasing people to have some sort of concession in their back pocket.T, we’ve seen some pretty ridiculous things on the ILSs.We’ve seen people like completely remove the photo of their community.Instead, it’s just words that say like two months free, that’s what they’re selling, so I don’t like that, that’s the focal point of our marketing, but I actually like that is the focal point of other communities’marketing because I think it’s a mistake and it gives up and it gives us the ability to do things a little bit differently.It tells you that what are they doing, what do they have to work with?

28:25 – T Tran

Because we know we have more tools in our arsenal to work with than just that, in our experience, and the way we do things as a management company are different.You guys will hear Foti absolutely go off on people and their marketing because that’s his realm and it’s really funny.You’re right, it’s not to criticize however people want to do it.Their sales tactics are what they are, but I will agree people are getting a little lazy.These last couple of years, let’s be very real, in certain areas, all you had to do was be breathing and open the door and you’re releasing a unit.Period.End of story.There were no sales tactics that were necessary to get that deal to close.Right now, as we move out of that, I kind of go, this is where the strong will survive.This is where people need to actually start working and really actually working leads and paying attention to their marketing, understanding and looking at the data that they’re getting.And I think that this is going to be the turning point for a lot of management companies.It’s going to be the turning point for owner-managed properties.We see that a lot still, right?Where you’ve got an owner who’s like, ‘oh, I can manage it all myself’.And they just kind of let it bump along, but we’re going to see a shift.I know for you, when you look at the marketing and you’re like cringing, because you’re like, ‘oh my God, that’s terrible.’But at the same time, we know we do things a little bit differently.So it’s interesting thing to see.And I think that just goes to say, how are you using these move-in specials as your tool?Are you relying on the move-in special versus using it to supplement an actual sales flow, because I think a lot of people have forgotten or didn’t learn how to actually create their sales flow.And I think that’s going to be really apparent coming up in this year.I really do.It’ll be interesting to see how it goes in 2025.That’s kind of how I feel.You guys, so at the end of the day.Move-in specials.Do we love them?Do we hate them?

30:15 – Chris Foti

We love and hate them.We love and hate them.We love that for our sales team to have a little bit of them in our pocket.We love not making that the focal point of our marketing.We love that other people are making that the focal point of their marketing.One tip for me that we learned along the way is if you are offering a concession.Don’t give it to them on the first month, at least in my opinion.Have the renter get committed to living in the community.Pay the first month rent.Maybe it can be the second month if you’re doing one month free.I think that’s important.You want them to be committed to moving in and be invested in it.They need to show that they want to move there.It’s not just so that they don’t have to pay anything up front.And I never apply any concessions to security deposits or anything like that.That’s just my opinion on it.So I think it’s good and I think it’s bad.

30:56 – Skyler Vanderwell

Yes, same here, Foti.I wholeheartedly agree.Let’s use them.Where they are effective, and for me personally, we are not selling a month free; we are not selling two months free; we are not selling a gift card; we are selling the community so we need to utilize those concessions as such.Right this is in addition to the community that you’re interested in; this is not something to drive you into the community out of necessity of budgets or what have you, because we want to see that retention as I mentioned.We’re going to see some interesting things here as far as sales tactics, and all of these things.I’m excited as to what 2025 is going to bring.This is make-or-break season.It isn’t that a unit’s available and you can just turn it on a dime.We are post-pandemic, and it’s our time to shine.With that comes the grind.

31:45 – Chris Foti

Another thing is we talked about the concessions in different scenarios, right?So if you’re going through a lease up, obviously there’s probably going to be some sort of concession strategy.If you’re stabilized, one way that you can avoid having to offer concessions is being on top of your renewal schedule.If you know you have residents that are going to be moving out a month or two ahead of where you’re at now, start marketing those ahead of time.If you get ahead of that marketing and you’re on top of that, you can definitely reduce or eliminate your concessions because you’re building up demand before you get to a point where the unit’s sitting vacant, you don’t have anybody to move in there, and then you go back to offering the coupons.Getting ahead of when units are becoming available, if you’re working on a stabilized property, will help you reduce the concessions that you’re offering.

32:25 – T Tran

Yeah, for sure.Well, thank you guys so much.Love hearing the perspective.And I think that you guys brought up great points about how move-in specials and concessions can be used in good and bad.Really, really great information.Everyone should stay tuned because we’re going to start doing Skylar’s stories of the day on the property.You know what?

32:43 – Chris Foti

Honestly, it’s better than Netflix.

32:46 – T Tran

Better than reality TV.You can’t make some of this stuff up.So thanks guys, so much.And we will catch you soon.