Advice on managing apartments in undesirable location

[Michael Stewart]

A little background: I work for a multi-family apartment management company, around 2 years experience in leasing/PM. Worked in five different markets over the past year and a half (I’ve travelled all over the country working different properties). I am currently the property/leasing manager for my current complex. 

Here’s my situation:

I manage a smaller apartment complex (>100 units) that was recently renovated in a competitive college market. My complex is in an undesirable part of town: assaults, drug trafficking and the occasional murder all taking place virtually down the block. I wouldn’t describe the area as a warzone though. 

I took the job about 5 months ago and have increased occupancy by 25%, and believe me, I have fought hard for each and every lease I’ve signed so far. The difficulty is this: The people with great jobs and credit scores go to the other side of town where a TON of new development is happening. The people that are actually from the area don’t qualify (typical denied applications have multiple felonies or evictions).

I am slowly but surely building the occupancy. I will be <90% in the next few months if I continue the current trajectory. But I can’t help but to feel I’m doing something wrong, like I’m missing opportunities to fill this place faster than I am now. 

So my question to all of you is, have you ever managed an underperforming asset in a “bad” part of town? If so, how did you max occupancy while acquiring and retaining an excellent tenant base? Additionally, what are some marketing strategies to entice people with good jobs/credit scores to sign leases? 

**Sorry if some of this vague, please let me know if you’d like me to elaborate on the specifics of the market or my building. I’m trying to stay somewhat anonymous here ;)

[Michele Fischer]

My experience has been that even if we can attract the more solid tenant base, they don't stay long.  Aim for small improvements on the current base, not step shift improvements.  This asset class just takes a lot of work.  Tenants who won't pull the complex down but also won't strive for something better are exactly what you are looking for.

Think about what you can do to differentiate your units.  One of our tenants decided to paint every surface mint green as a parting gift.  We did a partial repaint to tone it down, but the remaining green is very appreciated in a sea of white walled units.