Most people enjoy a good cup of coffee in the morning. It is the ultimate "me time" before we start our day. Just about every place of business (non-retail) has coffee and bottled water nearby during business hours. Why? And what does this have to do with multifamily?
Coffee is an amazing business tool. While probably overlooked by Drucker, it really is utilized across the world as a handshake, a welcoming comfort food. It says "stay a while". Why is that important? Let's talk groceries.
Retailers and Grocers devote significant people and resources to store layouts. In any grocery store of size there is absolute rhyme to the reasoning as to why milk is in one corner of the store no where near the bread, which is no where near the apples. The objective is to keep the shopper on property and allow them to walk/move past added merchandise.
In multifamily, our "stores" will have a model unit if possible. This is a place for people to roam around, stay on property and get a feel for the place. Not all properties have a model, but we can have coffee. It is a business tool we have at our disposal to give people a reason to stay a while. Can your coffee pot produce one additional lease each year? If so, how much value is that creating for your multifamily property over five years?
And, like with the grocery business, the longer they stay the higher the probability they will buy. In this case, they are usually contemplating a potential one-year lease. This may be a $7,000 or $27,000 decision. Give potential tenants cause to stay a while. Make sure the coffee is good. It may gain you one or two additional leases each year. Have fun determining your return on investment on that!
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Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel. For more information, visit: www.MultifamilyInsight.com