Jennifer Nevitt on how to maximize apartment rents

Maximizing yield from apartment buildings is important, and a successful lease-up for new ones is the key to early and ongoing prosperity for owners.

Jennifer Nevitt“We’re an asset appreciation group,” said Forty2 National Apartment Property Management chief executive officer Jennifer Nevitt at the North American New Apartment Construction and Mixed-Use Symposium and Expo at the Metro Toronto Convention Centre on June 21.

“We have to state we’re a property management company because no-one knows what an asset appreciation company is. We’re there to make the most money on that real estate asset.”

Nevitt, a 33-year veteran of the real estate business now based in the Philadelphia area, shared tips on how to accomplish those goals during a wide-ranging 70-minute session.

A good leasing team is a must

Nevitt stressed the importance of having a well-educated and well-trained leasing team, adding that these people must also be flexible and friendly to make renting an apartment as easy a process as possible for potential tenants. And if you’re going to ask a lot of your team members, they must also be treated with respect and compensated fairly.

“The front line equals the bottom line,” said Nevitt. “We align their interest to the owner’s interest, so when the owner makes more money they’re going to make more money.”

Nevitt said apartments should be designed for people, pets, packages and parking. They also need to have high-speed Internet, video surveillance systems and efficient ways to minimize trash.

Nevitt doesn’t support flat income streams where all apartments of the same size have the same rents. What floor a unit is on, its views and other factors should be taken into consideration, and having a variety of different styles and sizes is important. The biggest and best suites should have the best views while bachelor units should have the worst views and locations since they produce the lowest incomes.

“You have to make sure that every square foot of that real estate asset is very well-designed,” said Nevitt. “We put bachelors by our elevators and trash chutes.”

Toronto apartments have homogenized floor plans

Nevitt said she toured several Toronto apartment buildings while in town for the conference and was disappointed to see that so many of them had what she described as “functionally obsolete floor plans.” She added that these homogenized floor plans are “annihilating” yields.

“If you don’t have your unit mix right, it will be very, very difficult to make a lot of money.”

Nevitt said that Toronto apartment leasing centres, and the people staffing them, also leave a lot to be desired. She emphasized that they have to look good, be spacious and have helpful and knowledgeable people working in them to provide a great experience for potential renters, which will make them more inclined to rent in that building.

Reinforcing the name of the brand whenever possible is crucial, and placing a monument sign on the building can be a revenue driver. A trademarked name, an effective logo and a strong web presence will also make it easier for potential tenants to find a building.

Need to get “heads in beds”

Sometimes it’s necessary to cut rents in order to get “heads in beds,” which is a priority in generating revenue. Nevitt gave the example of a well-qualified tenant who wanted to move in right away if he could get $100 a month rent deduction. It was approved immediately because the tenant was willing to sign an 18-month lease instead of one for 12 months on the spot.

“Doing the right deal for the right reasons in the right market will maximize success,” said Nevitt.

Forty2 conducts psychographic studies, surveys tenants within 24 hours of them moving in to their units and compiles, collects and shares a lot of data with lenders and developers. This knowledge can be translated into more money.

“When you’re doing a new construction lease-up you can go in with hope or reality,” Nevitt said near the end of her presentation.

“You cannot manage what you cannot measure. You have to understand what the yield opportunity is. You have to understand how the revenue stream will be driven. You have to understand how your team can execute on that.”

Steve is a veteran writer, reporter, editor and communications specialist whose work has appeared in a wide variety of print and online outlets. He’s the author of the book Hot…

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Steve is a veteran writer, reporter, editor and communications specialist whose work has appeared in a wide variety of print and online outlets. He’s the author of the book Hot…

Read more

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