Demand or Marketing Problem? Here's What to Do When Your Occupancy Rates Are Down

If you're tired of dealing with the ups and downs of rental vacancies, you're not alone. Research shows that 62.5% of vacancies are in multifamily units, making it challenging to both fill and maintain your units.

But why?

The issue could point to specific rental market conditions that fluctuate along with inflation and talks of a recession.

Regardless of what’s going on in the rental market, your issue still boils down to addressing the demand or marketing issues in your community.

Not sure which one is the problem? Here’s what to do when your occupancy rates are down and secure more leases in your rental business.

Signs Your Community Has a Demand Problem

If you’re not sure if you have a demand problem or there’s something else going on with your vacant units, here are some telltale signs to look for.

1) Your Leases Are Stacked (and Struggling)

When the majority of your leases renew and end at the same time, it’s inevitable you’ll experience higher occupancy rates when people move out. The more units you need to fill, the more gaps in your rental income.

Stay on top of the problem with a stacking plan, or a visual representation of a property that shows the residents on each floor, square footage, and when each lease expires.

You can also add more detail to your stacking plan, like whether or not the unit has upgrades or any issues.

When determining demand, use your stacking plan to see the expiration date of the leases. You may think you’re winning with a high occupancy rate until they all expire at the same time.

It’s inevitable some units will take longer to lease out, especially if you’re looking to fill dozens in a large community.

Your stacking plan may also reveal that your units without laundry or those with outdated kitchens are lagging behind the rest.

2) Your Rents Aren’t Competitive

It’s been a wild ride for both home buyers and renters the last several months.

Have you looked at whether or not your rents are actually competitive to your marketplace?

Get to work collecting data on other multifamily properties in your area. But remember to consider the rents alongside the amenities offered.

Ask yourself:

How much are rents?
What are the in-unit amenities?
What are the community amenities
What are their online reviews like and reputation in your area?

Truth 💣: Your competitors’ rents may be higher, but their community swimming pool, rooftop lounge, and fitness center could make your rents look expensive considering your lack of perks.

3) No One is Jumping on Your Rent Specials

What happens when you launch a rent special?

Do prospective residents arrive in droves or are you seeing a trickle of people show up and leave without submitting an application?

If people are showing up but not signing, there’s a problem with your units, rent, amenities, or something else entirely that cannot be solved with a rent special.

Or…

Do you onboard new residents during rent specials, but still struggle with low occupancy rates over the long run?

Truth 💣: Your rent specials are temporarily fixing a long-term issue that could include:

Poor maintenance is driving away residents
You attracted the wrong residents who are looking for the best rent deals before moving on
Your amenities or property management are posing a problem

If your rent specials aren’t resolving your occupancy problems, it’s time to rethink your strategy and fix the underlying issues first.

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Signs Your Community Has a Marketing Problem

If everything looks okay with demand for your community, you may have a marketing problem on your hands.

1) There’s No Consistency to How Residents Find You

Ask your property managers how residents find your community and listen for valuable clues.

If no one is finding your community consistently, you have a marketing problem.

Prospective residents who wander in by foot, hear about you from word of mouth, or happen upon a Google ad are all valuable leads but prove wildly inconsistent.

If there are one or two marketing methods that are attracting more leads than others, you can double down on those efforts. The goal is to put more momentum behind what’s working to improve your results.

Or, you may also discover there’s zero consistency in how people find your community. Frustrating, right?

Look at your demand problem as an opportunity to launch a new marketing plan designed to convert.

Here are a few ways to strengthen your multifamily marketing and command better results 💪:

2) Your Google Bidding Strategy is Lackluster

What if you’ve already got a multifamily marketing plan in place but aren’t seeing results?

If you’re using Google ads, lackluster results are often a sign of a poor PPC bidding strategy.

There are a few essential steps to maximizing your conversions and making the most of your marketing ad spend:

👉 Collect data before figuring out your bidding strategies

👉 Use relevant, timely information in your bidding and ads

👉 Stay consistent to gain traction and see results

👉 Consider your community’s rental seasonality

You can simplify the process by using Smart Bidding, but there are times manual bidding may make sense. Learn how to make the most of your Bidding Strategy with our Mini-Guide to Bidding Strategies for Multifamily PPC.

3) Your Community Has Negative Online Reviews

What’s happening after a prospective resident sees your ad or Google My Business listing?

Research shows that 74% or renters read between one and 10 online reviews before making a decision on a rental property.

Truth 💣: It doesn’t matter how amazing your ads or bidding strategy is. If your online reviews are poor, you have a mismatch between your marketing and demand.

Make responding to online reviews part of your marketing plan. Address issues calmly and honestly while taking time to make improvements.

Encourage residents to leave feedback with your property managers about community issues or repairs–and act on them.

Over time, your community will gain a reputation for responsiveness and care.

Look for Overlap Between Demand and Marketing

Sometimes demand for your community and marketing issues overlap, making it a wise choice to address both areas at once.

The answer is simple, but it takes time and effort to see results: Carefully work through your demand issues and identify areas where your community lacks, including stacked leases.

Next, refine your marketing efforts, track your results, and make taking care of your residents the most important aspect of running your multifamily business.

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