You Own An Apartment Building, Now How Are You Going To Persuade The Tenants To Stay?
Deposits are an administrative burden and cost center that has long been considered a “cost of doing business.” Why? You have to comply with state regulations for each stage of the process: collecting the deposit; placing the funds in a separate account; informing the resident in which bank the funds have been placed; sending U.S. 1099 Interest Income forms to each resident annually; and refunding all, part or none of the deposit with an explanatory letter sent by certified mail. Each step in the process costs both time and money. You incur all the costs, and the banks profit from the easy money.
Solution. Offer alternative deposits.
How it works?
Resident (principal) buys a surety bond, that assures the owner that the resident will fulfill his obligations to the owner at the end of the lease term. If resident leaves a damaged apartment, or leaves with out paying the last month’s rent, the surety will pay the owner on behalf of the resident. The surety will then seek reimbursement from the resident.
The one-time, non-refundable premium is paid by the resident at lease signing and remains in effect for as long as the resident lives in the apartment.
Residents benefit as well by keeping their cash. They can reduce their move-in costs and find better uses for their money when they need it most. Imagine how much traffic you could generate if the headline to your ads read, “No Security Deposit.”
Leasing promotion ideas
• Include renters insurance in the rent
• Pay for instillation charges for the internet. Or, offer free wi-fi in the building.
When you are advertising a vacancy and potential tenants call inquiring about the apartment you should be prepared. When on the phone, don’t just give price and hang tell them the strong points on why they should rent. read more…
