Lease-up Property: A Complete Guide

A ‘lease-up property’ refers to a newly constructed or recently renovated property marketed to potential tenants to fill vacant units. The process of a ’lease-up’ involves attracting and securing tenants to lease these units to reach full occupancy or stabilization.  

Running a lease-up property might sometimes feel overwhelming, but it can be done with the right approach. A lease-up property manager’s job is to ensure the building operates smoothly and find new residents to fill vacancies.  

Our guide explains what a lease-up property is, the challenges faced during it, and why it is important to reach stability.  

What is a Lease-up Property? 

A lease-up property is a newly launched building looking for new residents, often comprising newly constructed, renovated, or converted residential structures. The biggest challenge lies in quickly filling the vacant units.  

When a property is in lease-up, it means the time from pre-leasing and stabilization. In other words, lease-up means the critical time when communities work on signing as many leases as possible as quickly as possible. The property team working at a lease-up must implement several critical moves to establish their brand within the competitive multifamily community. They can build websites, ensuring the on-site team is fully staffed.  

Why is Leasing Up Important? 

Achieving full occupancy is essential for various reasons, primarily to maintain a consistent cash flow for operating and maintaining the building. Without a reliable income stream, the risk of foreclosure increases as the building will operate with a negative net income, in this case. 

Leasing up properties guarantees higher rental income, providing a reliable solution. Reaching lease-up stabilization satisfies the property’s investors and reassures lending banks, leading to an improved return on investment (ROI).  

It is not only a matter of filling the community as quickly as possible; finding the right residents is crucial. The initial occupants set the tone for the property’s reputation within the broader community. Bringing in the wrong residents and experiencing lease breaches or non-renewals hinders the lease-up process. 

Leasing up is also important because: 

1. It accelerates the property’s initial investment returns 
2. The apartment community can establish its presence in the neighborhood promptly. 
3. The building can attract residents who prioritize timely payments and respect neighbors and the property. 
4. Once the lease-up phase is completed, the property staff can allocate more time to other initiatives, such as enhancing the building and its amenities 

What Are the Challenges of Property Lease-ups? 

Managing a lease-up property is like launching a new business. A lease-up property manager’s job description offers some guidance, but they may need more preparation for the challenges ahead. Here are some challenges that property managers may encounter when working on lease-up properties: 

1. Marketing 

Finding potential residents can be quite challenging when the property is new with no other residents living there. In such cases, new residents may need a basis for comparison regarding the living experience at the property. 

2. Costs 

Managing standard operating procedures, taxes, and bills can be challenging, but the possibility of unexpected expenses can further strain the budget. This situation becomes challenging when the property’s revenue is insufficient to cover these costs. 

3. Time 

Cost and time are interlinked. There is time pressure when finding new residents—it’s a race against the clock. With each month without rental income, expenses and debts add up. 

4. Staff 

Training newly hired building staff can be a time-consuming process. It also presents a challenge to budget for their salaries until the property reaches stabilization. 

5. Construction 

While the property may be ready to accommodate new residents, construction work may still be ongoing. Whether it is painting, electrical wiring, or completing additional sections, property managers need to manage these tasks while assisting residents during the move-in process. 

Lease-up Strategies to Find New Residents 

Let’s discover the strategies for achieving lease-up stabilization rapidly. The most effective approach is to attract qualified residents and retain them over the long term. 

A strategic apartment lease-up checklist includes the following: 

1. Recruit an Experienced Property Staff Team 

Before attracting residents, having a capable team is essential for your lease-up strategy. Managing a lease-up property requires expertise, so recruiting experienced building staff, property managers, and leasing agents who have worked for busy residential properties is crucial. Offering suitable incentives is essential to finding the right staff.  

You can attract skilled and dedicated staff members by: 

1. Providing a career path 
2. Prioritizing employee well-being 
3. Providing self-care allowances 
4. Offering modern benefits 
5. Planning for the property’s future 

2. Create a Waiting List 

A crucial strategy for a lease-up property is understanding that you don’t have to wait for the building to be fully livable before prospecting residents. 

Once you have a projected construction completion date, you can begin with renters’ search. Create a waiting list to notify prospects about the building’s upcoming application acceptance period. This proactive approach saves a lot of time and operating expenses when the property opens. 

Consider providing waiting list members with a sample lease agreement detailing move-in dates and building expectations. 

In the event you have an available unit for viewing, it is advisable to offer apartment tours. If physical access to the building is limited, consider providing virtual tours of available units. 

3. Build a Brand 

While a lease-up property offers a fresh beginning, it might lack a distinct brand identity. Establishing a recognizable brand presence is essential for attracting prospective tenants. 

The initial step in brand-building entails developing a property website. This website should encompass all essential information potential tenants may seek regarding the property. 

Your website should have: 

1. A lot of pictures of the property and units 
2. Important details included in the lease, including rental rates and amenity fees 
3. Contact details for the property manager and leasing agents 
4. A building map showcasing the location of amenities 
5. An online application form

Along with a website, you can enhance your building’s brand by creating a social media presence. As your building lacks any resident reviews, it is important to be innovative in engaging with prospects online. 

Consider the following tips for social media posting: 

1. Interact with local vendor accounts, including those from specific towns/neighborhoods, community centers, and colleges 
2. Engage with local business accounts by liking, posting, and commenting 
3. Connect with followers by asking questions and creating polls to encourage interaction 
4. Consistently highlight the unique features of your building, particularly its amenities 
5. Showcase new residents as they move in, such as welcoming specific residents through posts 

4. Sell the Amenities 

If the property’s location isn’t its primary selling point, you can consider highlighting its distinctive features and amenities instead. Look beyond just apartment sizes and prices; focusing on the available amenities is an effective strategy for attracting prospects. Prospective residents are interested in what sets your building apart from others. 

Amenities you can highlight are: 

1. Pools 
2. Fitness centers 
3. Simple access control systems 
4. Outdoor spaces 
5. Parking 
6. Inclusive pet policies 
7. Game rooms 
8. Centralized AC 
9. Smart technology such as blinds, thermostats, and lights 

5. Offer 

Providing exclusive grand-opening incentives presents an excellent opportunity to attract potential renters to your property. These incentives can serve as the additional motivation residents require to finalize a lease agreement with your property. 

Incentives can include: 

1. Reduced first month’s rent 
2. Move-in assistance 
3. Gift cards to local businesses such as restaurants, grocery stores, and movie theaters 
4. Reduced parking costs 
5. Reduced laundry fees 
6. Appliances such as air purifiers 
7. Fixed rental rates for a set period 

Conclusion 

You strive to ensure your new building is successful, operates seamlessly, and generates profits. This requires a partner who comprehends precisely how to achieve these objectives, enabling you to allocate your resources efficiently. Reach Beach Front Property Management Inc. for new lease-ups. Our team of specialists excels in new construction lease-ups and continuous property management. 

Once we establish the targets like construction timeline and objectives, we’ll tailor the Beach Front Lease-Up System to fulfill all your requirements promptly. 

Contact BFPM for any queries related to property management.