Budgeting for Market-Rate Multifamily Lease-Ups

This week, it is time to talk about B.S.

Budget Season! Wait.. what did you think we were talking about..? 

The first of August marks the beginning of budgeting season for developers and suppliers alike. Although sometimes dreaded, budgeting for a multifamily lease-up is one of the most critical aspects of managing a top-tier property in this market. Class-A projects are the crown jewels of your portfolio, attracting residents who demand the best living experience "luxury" apartments can offer. 

Effective marketing is no small feat or expense. As we head into August, getting your strategy right is the key to avoiding prolonged vacancies and ensuring a smooth lease-up process for your 2025 future pipeline.

So, let’s get right into it!

Understanding the Market and Setting Goals

First things first, you need to know your market inside and out.

This means a deep dive into market analysis. You’re looking at competitor properties, local economic trends, and the preferences and spending habits of your target audience. A strong multifamily marketing partner will usually provide this for you.

With this data, set clear, measurable goals. These goals will be your roadmap, guiding where and how you allocate your resources to hit your lease-up timeline and occupancy rates.

Agreeing On An Appropriate Number That Aligns With Those Goals:

Effective marketing in pre-leasing isn't just about platinum ILS packages and a “pretty” website.

It involves a comprehensive strategy that includes understanding your market opportunity, highlighting unique property features and finishes, leveraging high-quality visual advertising, and using data-driven pricing strategies.

The caveat is you have to spend money to make money here. All too often, stakeholders agree on a measly $50K to market their $100M project.

To discern appropriate spending, our market-leading approach is at least .50% of their overall project cost for apartment projects and 1% for condominiums. These strategies are tailored to what we know works in today's market.

This is a holistic approach to all aspects of marketing you may not even consider that seasoned industry experts plan for.

If those numbers gave you sticker shock, let me remind you of the ROI here.

Return on investment = (Net Return / Cost of Investment) x 100

For example, for the Aubrey project, Authentic's partners at Left Lane attribute the comprehensive brand experience Authentic created to a 5% increase in rent per square foot.

This amounted to $38k of additional monthly NOI and a $733,000k increase in value after the first year alone.

Now, if you forgo sizable investments for marketing expenses, you will struggle to fill vacancies and miss out on qualified traffic. Plain and simple.

Multifamily marketing is not one of those line items on the proforma where you can expect to do more with less.

You will do less with less.

Read more about how higher occupancy and higher rents can coexist with this approach in our recent insight, which includes strong case studies to prove it!

Allocating Resources: Digital Marketing and Advertising

In today’s world, digital marketing isn’t just a piece of the pie—it’s the whole bakery. You’ve got to dominate marrying your digital and traditional platforms with precision targeting and measurable results. And that starts with a strong digital presence.

1. Website and SEO: Your website is your property’s digital brochure, storefront, and more. It needs to be sleek, professional, compliant, and user-friendly, showcasing high-quality images, virtual tours, and detailed property descriptions. SEO is your best friend here; ensure your site ranks high on search engines to drive organic traffic.

2. Social Media Marketing: Platforms like Instagram and Facebook are goldmines. Post engaging content regularly, run targeted ads and interact with your followers. Create a buzz that turns into buzzworthy returns.

3. Paid Search and Display Advertising: Google Ads and display networks can laser-focus on potential residents based on their search behaviors. Invest in strategic PPC campaigns through a specialized real estate partner to drive immediate traffic to your site.

Make sure the keyword bidding and ad copy are compliant with fair housing. Keywords like “safe” and “family-friendly” are playing with fire. Just don’t.

Traditional Marketing: Balancing Old and New

Don’t ditch traditional methods. Onsite signage, construction fence wraps, leasing materials, window clings, all of it. They still pack a punch, especially for Class-A properties where small brands are creating big intrigue with well-designed custom physical materials.

1. Print Advertising: True-to-brand designed brochures, flyers, and branded gifts will polish your property’s image before it even opens. Make sure these materials are professionally designed and highlight your property's brand experience. Templates, or rinse-and-repeat marketing materials, will blend right in with the rest of the market.

You don’t have time for that!

2. Experiential Events and Open Houses: Hosting exclusive events or open houses costs something. Whether you have barter sponsorships with local businesses, or splurge on an over-the-top open house with fire dancers in the pool (you need a permit for that) or a mini-bar sip and see (you also need a permit for that), plan ahead for these expenses. These events are a great way to build intrigue and give potential residents a firsthand experience of hand-selecting their very apartment home before it's even finished.

Don’t let your future residents leave empty-handed! Think back to those branded experiential gifts we mentioned above.

3. Planning for Upkeep: Like all great marketing materials, they aren’t a get-it-and-forget-it expense. You should budget for refills on pieces like business cards, move-in gifts, updated window clings, and leasing materials on a quarterly or biannual basis.

This may seem like a lot, but when your property is leasing like crazy, your site teams can easily run low on these items.

And that’s a great problem to have.

Monitoring and Adjusting the Budget

A budget isn’t a set-it-and-forget-it tool. Continuous monitoring and analysis are crucial. Prices change, setup fees can add up, and you’ve got to plan for it.

Track KPIs like website traffic, social media engagement, and lead conversion rates to prove ROI and cost per lease. This data justifies a more generous budget when presenting to stakeholders for approval, ensuring funds are directed to the most effective channels.

A Dynamic Approach to GTM Budgeting

Budgeting for a Class-A multifamily lease-up is an art and a science. You need a dynamic approach that blends digital innovation with traditional marketing methods.

Understand your market, set clear goals, and allocate resources smartly. With a strategic plan and a seasoned multifamily marketing partner like Authentic, you’ll attract and retain high-quality residents, setting your property up for long-term success.

As budget season kicks off, you’ll be geared up to make every dollar count!