Early on in the recession, I believed it was just my imagination. But later I saw the effects of a recession I thought was make-believe. I saw massive job losses and too many foreclosures to think of. But the one thing that has continued to pay me are my apartments. The cash flow may not be as high as it was in prior years, but it’s still there. And believe it or not, so far in 2010, the cash flow has increased slightly. And that’s due to the fact that I’m running a lot more efficiently and cost consciously. I have turned my staff and myself into lean n’ mean apartment investing machines. So far, and God willing, our apartment investing has been recession-proof. Amazing, huh?
I’m going to share with you 4 tips what I believe has caused our apartment investments to not be negatively affected by the current recession.
Recession-proof tip # 1 – Invest in apartments. Yep, that’s right. You can’t beat them! I’m so glad I didn’t invest in a shopping center or office building. Those guys are a nervous wreck right now. In 2008, we raised our rents three times as people down-sized and moved into apartments. In 2009, our rents went flat, but we were still able to be over 90% occupied for the year by reducing our rents by a few dollars. In 2010, we’ve learned an important lesson about tenants that I explain in tip #2.
Recession-proof tip # 2 – Tenants are like gold coins. What do I mean by that? When someone gives you a gold coin, you treasure it. You don’t spend it. You keep it protected and secure. Treating our tenants like gold coins has caused our apartments to stay full while many other complexes struggle with high turnover. What’s our secret? Simple. We created a great lifestyle in our apartment complexes for our tenants. Happy tenants don’t move out. Happy tenants pay on time. We created a lifestyle that tenants don’t want to leave. Pretty simple stuff. Shhh…it’s a secret.
Recession-proof tip # 3 – Intensify your marketing to tenants. Once we saw how well creating a desirable lifestyle worked for us, we set out to market this lifestyle like crazy. Don’t tell anyone this, but we actually marketed to our competitors that we knew of that couldn’t match the lifestyle we created (and for the same rents). In simpler terms, we stole tenants away from other lesser complexes. Our marketing program was very targeted, very focused, very intense, and we knew the exact tenant profile we wanted. And we got it.
Recession-proof tip # 4 – Adopt cutting-edge technologies. Today, it’s all about being more efficient. It’s about using the tools you have available to make your job easier (so that we can pile more onto you!). Our whole office system is automated and the staff is well-trained on the system. Our maintenance guys are literally tracked hour-by-hour during their shift using technology not available to us two years ago. Our marketing system has amazing follow-up abilities where absolutely nothing gets through the cracks. I-Pads are next (but that’s a secret, okay?)