Multifamily Renters Upgrade to New SFR Offerings
Companies are blending management strategies of multifamily and single-family properties.
The single-family-rental and build-to-rent industries are booming so much that Westdale Asset Management is currently in lease-up at 11 communities.
Likewise, Blanton Turner, last year bought 2,000 homes per month and continues to bring them online.
Cross-over investments between the single-family and multifamily markets are an emerging trend as real estate investors and operators look to expand into different market segments, combining property types into a single investment portfolio.
A panel of sector players discussed the topic at the Apartment Innovation and Marketing Conference in Huntington Beach, Ca., with moderator Andre Sanchez, COO, Rently.
Kyle Talmage, Vice President of Single-Family Rentals at Westdale Asset Management, said the supply chain has improved so much lately that it takes his firm only about five or six months to put a new home in the ground.
Heidi Turner, Founder, Turner Blanton, said the recent expansion was so new and so robust, that her company hired an employee focused just on “change management” to manage staff training and other management guidance.
Sparkle Allen, SVP, Marketing & Brand Experience at FirstKey Homes, said 27% of her renters came directly from the multifamily properties. Her portfolio has a 72% to 78% retention rate.
“Renters want more space,” Sparkle said. “They want rooms to dedicate to their home offices – they’ve become tired of working on their kitchen tables, closets, or even having to put their laptops on their ironing boards.
“Yards, fences, and pets are what they are looking for. With mortgage interest rates up, we are able to attract would-be homebuyers.”
Turner said 33% of her renters came from Class A apartment communities.
Theresa Steen, Managing Director for SFR at Cushman & Wakefield, said her firm’s retention rate is 65%.
“Even with high occupancy, you need to maintain your marketing spend even after the communities are stabilized,” Steen said. “Once you see turnover, you have to stay relevant online by updating your content or you’ll lose prospects to your competitors.”
She said it’s not uncommon to lose 4% of your occupancy during the lease-up period.
“What we’re seeing in this sector is that we can’t skimp on marketing,” Talmage added.