INDEPENDENT HOMEOWNERS: READ MRLANDORD

MRLANDLORD'S COLUMN August 4, 1999


MR. LANDLORD on Rental Management

"SUPER-SIZE IT!"

I enjoy watching how other industries increase their profits. I especially like the additional challenge of seeing how I can use profit-building strategies used by other industries in the rental property business.

The fast food industry uses a simple strategy to substantially increase cash flow that rental owners can learn from.

Picture with me for a moment a prospective customer going up to the counter at a popular fast food chain (I say prospective customer because until they actually give money, they are still a prospect).

The prospect asks for a hamburger. What does a smart counter person say then? Probably something like, "Would you like fries or a drink with that?"

If the prospect asks for a basic combo package, burger, fries and small drink, what would the counter person say then? "Would you like to SUPER SIZE IT?"

The purpose of that question is to offer the prospect the option of bigger fries and/or a bigger drink, a better value for the customer and more profits for the restaurant. The counter person is trained to always offer additional items or a bigger package, because fast food restaurants have learned that if they simply ask prospects if they'd like more, a percentage of them will accept the offer. It is that simple. The "super-size-it" strategy works!!

Now let's picture the typical rental showing scenario. A rental prospect looks at a home you have for rent. She likes what she sees, and tells you she would like to rent your home. What do you say? If you are like most rental owners, you pull out a rental application and tell her how much money they will need to move in for the rent and security deposit. You have just blown an excellent opportunity to increase your rental profits.

Let's transplant you, the rental owner, into the counter person at the restaurant. The rental prospect has just told you that she was interested in buying a hamburger (renting your property). What do you say? You are quick to tell her, "That will be 99 cents" (in essence that's what you are saying when you tell the rental prospect how much rent and deposit is needed). What did you fail to do? You failed to ask her if she would like fries or a drink with that.

You failed to ask if she would like to SUPER SIZE IT.

Here is how I have suggested that rental owners handle the same scenario, using the restaurant's super-size-it strategy. A prospect comes to your rental and tells you she is interested in renting. Here's what you do. Instead of asking for money, you say, "I'm glad you like this standard home. Would you like to know about five extras or upgrades we make available to all new residents." The response by prospects is always YES.

You then show the prospects a sheet of paper that lists the five upgrades, and let them know that all five upgrades are included in your deluxe rental package that they can get for an additional $150 per month in rent. No one goes for that package.

However, you then say they can have any one or two items (fries and a drink) on the list, which is a customized package for just $35 or $45 extra per month. One out of every three prospects will take you up on the customized offer. Therefore, what have you done? You have just SUPER-SIZED your rental and your cash flow.

The next time you go to rent a property, learn from the restaurant industry. Don't just ask for the money, ask if they want fries or a drink with that (i.e., ceiling fan, choice of wall color, or color television)?

Ask if they want to SUPER SIZE IT (i.e., a customized rental package). Use this strategy and SUPER-SIZE your cash flow in 1999! .

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Reprinted with permission from MR. LANDLORD newsletter, #1 national
publication for rental property owners. For a free sample, call
1-800-950-2250 or visit our web site www.mrlandlord.com.


Jeffrey Taylor Editor-MR. LANDLORD, a leading real estate mangement consultant, writes for www.RentConnection.com, where property managers and individual home owners list their available rental properties, nationwide.

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