Business plan

Online Reviews Matter

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In today’s digital age, consumers are bombarded with flashy images and catchy taglines wherever they go. We live in a society where ads follow us online and appear as based on our search history.

With all products claiming to be “the best,” differentiating between two similar choices can turn into a daunting task. Once targeted ads are thrown into the mix, the volume of options can overwhelm anyone.

How are consumers expected to make the right choice?

According to Jia Wertz, a contributor for Forbes.com, “Customer reviews are powerful – so powerful, in fact, that the vast majority of people trust online reviews just as much as they trust the opinion of a close friend,” (Wertz, 2019). Honest and authentic online reviews from real people that have used, or are using the product or service, have become one of the primary resources referenced during the research phase of buying. Wertz goes on to site that 63% of consumers seek out online reviews before visiting a business. This phenomenon is no different in the apartment complex industry.

Globally, across AFI’s 14-state portfolio, our average Google rating is 4.5/5.0. All AFI on-site managers are continually coached to acquire as much feedback as possible from stakeholders of the property (tenants, neighbors, store owners, vendors).

Entrepreneur.com provides five great tips on how to improve your company’s online presence:

  1. Use an online reputation management software. While not feasible for all businesses, this solution could be helpful for companies looking to make the transition from small to medium business who are also in need of scaling their marketing efforts.
  • Educate customers on how to leave a review. If a consumer agrees to leave a positive review, help them do it. AFI managers are encouraged to direct stakeholders to the property website while they are still on site in order to capture their true feedback.
  • Ask every customer for feedback. “It builds amazing legacy and forces you to get better. Asking everyone to write a review will expose most flaws publicly, giving you free insight on how to improve the business,” (Nwazor, 2017).
  • Respond to reviews honestly and publicly. All reviews, whether good or bad, deserve thanks to the individual for sharing their opinion or a professional response regarding corrective action, if applicable. See below for examples of responses to both positive, and negative reviews:
  • Provide an incentive for customers to write reviews. While incentivization should remain a last resort, promoting contests with prizes awarded for posting reviews can be a great way to encourage audience engagement.

References:

Nwazor, T. (2017, February 6). 5 Surefire Ways to Improve Your Site’s Online Reviews. Retrieved from:https://www.entrepreneur.com/article/288388

Shewan, D. (2019, January 23). The Rise of Ad Blockers: Should Advertisers Be Panicking?(!!!). Retrieved from: https://www.wordstream.com/blog/ws/2015/10/02/ad-blockers

Wertz, J. (2019, May 28). The Business and Monetization of Product Review Sites. Retrieved from: https://www.forbes.com/sites/jiawertz/2019/05/28/the-business-and-monetization-of-product-review-sites/#3b80685b5d4b

Colin CosbyOnline Reviews Matter
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The Importance of Enhanced Security

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According to John Gramlich of the Pew Research Center, “both violent and property crime rates have dropped significantly since their ‘peak’ in the early 1990s. An annual report compiled by the Federal Bureau of Investigation shows violent crime decreasing by 49% between 1993-2017 and a 50% decrease in property crime for the same period” (Gramlich, 2019).

While the statistics mentioned above indicate a trend in the right direction, close living quarters and frequent interactions with neighbors on a high-density apartment complex can result in escalating activity at any community.

Tenant safety has always been, and will continue to be, a top priority for AFI. Earlier this year, an asset in North Carolina was showcased that saw a 40% reduction in on-site crime since AFI began managing the property in 2017 (www.afi-llc.com, 2019).

With tenant safety being top priority, recently AFI’s on-site team at a campus asset in Lawrence, KS worked diligently with the Property Owners to replace all outdated entry doors on site with high-tech, secure, key-fob entry doors.

The new doors not only improve curb appeal at the property, but they accomplish AFI’s goal to maintain a safe and secure living space for all tenants. In addition to increasing safety on the property, this project was completed almost $30,000 under budget AND included the implementation of a property-wide security system.             

Prior to moving, AFI advises prospective renters to ask themselves the following questions regarding property safety:

  1. Is the community well-lit? Properties with poor exterior lighting tend to attract suspicious activity.
  2. How is the property’s curb appeal? Failure to tend to general maintenance items can be indicative of a lack of concern from the landlord.
  3. Are crime statistics available online? There are several free online tools potential tenants can use to learn more about the crime history of a property such as CrimeReports.com and CrimeMapping.com

Since the security door install, both CrimeReports.com and CrimeMapping.com indicated zero reported incidents at the Lawrence, KS asset.

Gramlich, J. (2019, January 3). 5 Facts About Crime in the U.S. Retrieved from: https://www.pewresearch.org/fact-tank/2019/01/03/5-facts-about-crime-in-the-u-s/

Cosby, C. (2019, May 28). Safety Is Not an Amenity. Retrieved from:
 https://www.afi-llc.com/safety-is-not-an-amenity/

Apartment Security and Safety Tips for Renters from Safewise. Retrieved from: https://www.safewise.com/resources/apartment-security/

Colin CosbyThe Importance of Enhanced Security
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Why buy B and C class apartment assets in today’s market?

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1. Tenant Pool Stability

On the apartment quality scale of A—B—C—D, owning A-class assets is not all it’s cracked up to be. In an economy of fluctuating incomes and employment, with underemployment as a growing trend, holding owning B- and C-class assets is the most enviable position because these asset classes benefit most from ‘downward mobility’ pressure being exerted on the tenant base. Former A-class tenants are not going down to D-class units. Rather, they are settling for B-class apartments. Similarly, former B-class tenants are settling for C-class apartments. Given that D-class properties are uniformly crime-ridden and unsafe, the bulk of the pre-existing C-class tenants will strive to remain in a C-class property, spending more on housing than the average tenant by sacrificing elsewhere.

2. Non-Speculative Market Space

There is one very important question to answer when contemplating the development or purchase of an A-class apartment asset—Is there a large enough pool of viable tenants with the economic means and the appetite to live in the most expensive, albeit most richly appointed, apartment property in the area? While the most expensive product on the market carries distinction and prestige, these features do not necessarily lead to greater sales. In our unpredictable economic climate, we can emphatically affirm that these assets do not typically produce meaningful financial returns for investors.The most important question to ask regarding prospective B or C class asset is this: Does the property have the right problems? That is, does the property have:

  • Deferred maintenance, and/or
  • Poor management

Deferred maintenance and poor management are quickly remedied by the application of intelligent and aggressive property management fundamentals. Commanding property management focused on correcting physical deficiencies, improving tenant quality, and introducing tenant-centric services produces momentous returns on investment.

B- and C-class assets are established properties in their respective sub-markets, and new C-class apartment buildings will not be built at the same class level because construction costs are prohibitive. Additionally, C-class assets can be elevated to B-class properties with a recoverable cost basis. In most cases, the cost of entry is too high to elevate B-class assets up to A-class quality.

3. Cost of Entry = Volume

Compared to A-class assets, the per-unit cost of B- and C-class assets allows for many more units to be purchased for the same capital investment.

4. Less Competitive Acquisition Environment

Effective B- and C-class apartment management is complex, involved and downright messy. It requires hard work, singularity of focus, rehearsed professional processes, intelligent decision-making, sharpened experience, industry expertise, broad vendor connections and gritty determination. These facts can intimidate investors who are accomplished in investment acquisition, but who lack real-life management skills and experience.

AFI excels at the real-life, day-to-day management needed to support the discerning investor’s objectives.

tourvistaWhy buy B and C class apartment assets in today’s market?
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