After doing our research in the surrounding area we found that we were one of the only communities without a van to shuttle the residents around the community, to and from appointments and special events. We found that our competition had transportation service and had a much higher occupancy because the van service attracted seniors who didn’t want to drive. With that knowledge, we budgeted $54,000 for a twenty-one-person van into our operational projections. We have owned this property long enough to tell you that this investment in the van has increased our rentals, occupancy, and cash flow and ultimately the property value.
The second action we took in response to the three items in our plan related to pricing. Clearly our residents valued the first-floor apartments more than the second-floor units, so we priced them accordingly, making the first-floor rents slightly higher than the second-floor rents. Over time we were able to lease these first floor apartments for $75 per month higher than the second-floor apartments. We also increased the rent on the units that had exceptionally good locations or outstanding views. This equated to over a $6,000-per-month increase in our cash flow and the first-floor apartments are still 100 percent occupied!
Finally, in response to point three in our plan, we renegotiated the bulk cable and alarm agreements. The existing agreements combined were about $21 per unit per month for all 182 apartments, regardless of whether or not the apartment was occupied. This equated to a $3,822 per month savings. Better yet, the residents liked the new arrangement because for the first time they could choose the cable plan they wanted, instead of being locked into a plan negotiated by the absentee ownership eight years prior. The same went for alarm service.