Peter Lohmann's Mailing List - Issue #44

How We Reduced Rental “Days On Market” by 55%

In January of this year, I realized we had a big problem.

We had recently started carefully tracking our median rental “days on market” (DOM) and reporting on it at our weekly leadership “Level-10” meetings.

What we found was bad - really bad. 42 days (I’m embarrassed to write this, honestly). To be fair, January is about the worst time of year to fill rental units, but still. It was deeply troubling. For reference - our average rent at the time was $1,160 (now $1,300).

For the stats nerds like me - we’re looking at the trailing 90-day median, because from the property owner’s perspective, they have a 50% chance of experiencing a vacancy shorter (or longer) than this number. And we only include units that have already leased - ie, we’re not looking at average days on market for units that are currently on market - only those which have already successfully been leased. I’m not sure if this is typical — if you track this metric differently, I’d love to hear from you!

Our leasing manager and I got together and started digging into the problem. Here is what we found:

• Self-showing prospects (we use Showmojo) were turned off by our requirement to input their credit card for verification.

• A good number of otherwise well-qualified applicants were just barely missing our minimum credit score of 640.

• We had too many properties located in unsafe and undesirable neighborhoods (they would sit vacant for months).

• Too many phone calls from prospects were getting missed.

After some back-and-forth discussion and healthy debate, we made the following changes to address those issues.

1. We switched from using credit card verification to government ID verification (easy to change this in Showmojo). It requires a little more work on our end (each prospect has to be manually approved after looking at a photo of their ID), but this has resulted in WAY more self-showing traffic at our rental listings.

2. We lowered the minimum credit score from 640 to 620. The data is very clear that credit scores are highly correlated with eviction and skip rates, so I was wary about this one. But our leasing team convinced me that as long as the applicants were strong in all other areas, the risk was minimal.

3. We dropped a couple clients who had the worst of the worst properties and revised our service area to prevent taking on management in those areas in the future.

4. We turned on Showmojo’s “Live-Answer” feature - so they handle just about all our leasing phone calls!

With all those changes in place, we noticed an immediate improvement.

Let me now share our median DOM from January to now:

I’d like to see this number get down to 2 weeks or less, and maybe that will happen as we enter the height of the leasing season. But I’m no longer too embarrassed to share our leasing days-on-market with potential clients (and my peers in the industry).

Opportunity for Under-Represented Property Management Company Owners

I’ve been thinking hard about how I can give back to the property management community, which has been so welcoming and helpful to me these past 10 years.

I’ve experimented with a few different things, but what I’m finding to be the most impactful (and frankly, the most fun for me) is coaching.

So I’ve decided to give away 3 months of free coaching to one lucky winner!

If you’re a female or minority property management company owner interested in scaling up your business or streamlining operations, please consider filling out the application. The deadline to apply is Sunday, April 23rd and I will announce the winner on Friday May 5th.

Please share this opportunity with anyone you know in the industry who you think could benefit from working with me.

Not qualified, but still interested in working with me? I don’t currently have any availability for new coaching clients outside of this promotion, but continue to watch this newsletter for an announcement when space opens up again.

Peter & The Wolf: 30 Days with Autopilot

It's been 30 days since the launch of LeadSimple’s Autopilot. What have we learned? What have we built? Where are we going next?

Get ready to blast off into the world of automation with us as Wolf Croskey and I share tips, tricks, and dad jokes galore. Join us on the free live webinar April 20th! Space is limited so don’t wait to register.

Automation Tip of the Week

via LeadSimple’s excellent training library:

You likely have a lot of tasks you need to do each month, that aren't related to specific properties, owners, or tenants. For one-off tasks, you can create a to-do tasks process! Copy the “To Do Tasks” Process into your account from the Library to get started, then watch this video.

Industry News & Events

• Evernest and I are hosting a free live webinar TOMORROW to discuss process optimization! Register here.

• Moses Kagan is starting something new, and it looks incredible. The “Y Combinator for real estate operators”. I’ll have more to share on this in the future, but for now, go read the announcement.

• The NARPM Broker/Owner conference is April 25-27th. You can register here. I’ll see you there! If you are a coaching client of mine (or affiliate) - I’ll be doing an exclusive meetup.

• Registration for SMBash is still open (starts April 27th in Austin). Going? See you there. This event was SO fun last year.

Closing Thought

~~~~~

Property Management Coaching: No availability - check back soon!

Looking for a longer-term partnership, private community, my full Notion package and more? You may be a good candidate for our Property Management Business-in-a-Box program. Apply here.

That’s all for this week! -Peter