Why Landlords Should Sponsor Block Parties

The landlord stereotype needs an extreme makeover. There is no reason to drag the default tactics from the last century into this one. We are now living in a Web 2.0 world where the desire to connect socially is more important than ever. And just like Mark Zuckerberg, Facebook's founder, landlords are positioned to profit from it.

Capitalizing on people's need to connect and feel safer in their neighborhoods isn't difficult. Just pay attention to the interconnection between your investment and its surrounding community. Do something small to help people say "hello." Sponsoring an annual party will do the trick.

To be completely transparent, I enjoy hosting block parties around my real estate holdings. It's fun and suits my personality. However, there are sound business reasons behind this idea, three of which are presented below:

Annual Parties Can Improve Your Cash Flow
Generally speaking, people want to live in safe and vibrant communities that have healthy social norms. Block parties and neighborhood events are the types of activities that improve the area's desirability and that help create (or sustain) rent premiums.

Block Parties Can Help Build Your Equity
When you encourage group events that your tenants enjoy, they are less apt to move out. This being the case, it is wise to invest a small portion of your acceptable vacancy reserves into annual parties. Spending a little to prevent vacancies is better than setting aside a lot in case tenants move out. Lower vacancy rates translate into higher net operating incomes and more equity.

Parties Help Protect Against Neighborhood Decline
Parties give buy and hold investors a mechanism to help ensure the neighborhood surrounding their properties get nicer over time. Regular positive gatherings give people a sense of belonging. This helps lift expectations and results in a positive self-fulfilling prophecy. Regular rah-rah sessions are good.

But here's the kicker, to fight against neighborhood decline, residents themselves need to be involved. However, from my observations at countless neighborhood meetings, tenants will rarely be more civically active than their landlords. I call this the "Landlord Lid" and for this reason alone, every landlord that counts on their property appreciating over time, should participate in street-level, community-building activities. This is especially true when the number of renters outnumber the owner-occupied households.

Where to Start
If you're starting from scratch, consider taking on an annual event by the National Sherriff's Association. It's called National Night Out which is always held on the first Tuesday in August. On this day neighbors are encouraged to step outside their homes and meet each other. These parties can be as simple as ice cream socials or more elaborate like potlucks with street bands. It really doesn't matter. What's important is that there are a lot of ice-breaker games, law enforcement and community leaders are invited, and everyone has a good time.

If your block already has an annual tradition, like a Fourth of July celebration, then chip in for fireworks or contribute cash to give the event more razzle-dazzle. You could also put the event on steroids by encouraging other landlords to match your contribution. Image what that would look like!

Did you know your equity is having relations with the neighbors? Do you approve? You can improve the situation for the cost of a few cartons of ice cream and some encouraging words. Create some goodwill you can take to the bank. Do something this year!

You may also enjoy reading: 5 Tips to Make Your National Night Out Celebration the Best Ever