Books to Bricks A home buying program for student residents Presented by: Brian Hellwig, Security and Apartment Manager (email@example.com) Rick Schneiderman, Sr. Fiscal Manager (firstname.lastname@example.org) www.Reslife.net November 2008
Brief History of Allerton • 224 Garden Style Apartments built in two phases in 1963 and 1966 • 12 Buildings • Built in response to changing demographics of college students in the 1960’s • Intended purpose was to house students with families
Years 2000 - 2006 • KSU Residence Services, utilizing bond funds, invested over $136,000,000 to build eight new residence halls and refurbish all other existing traditional halls • Allerton was not included • Continuing decline in occupancy, PLUS real and perceived deficiencies at the complex (price, amenities, facilities, intangibles)
Allerton Task Force • In 2006, a task force was appointed by the Director of Residence Services • The Charge of the task force was to research the issues surrounding Allerton and seek ways to stabilize occupancy • Task Force used a SWOTS analysis and a survey of residents to gain baseline data and generate a plan of action • Also surveyed local apartment complexes for prices, amenities, lease terms, etc.
Task Force Findings • The “price and value” of Allerton was by far the biggest drawback and concern of residents • Facilities, including outdoor maintenance were also identified as needing attention • Programming and Safety and Security were rated highly by residents • Needed more detailed data from Allerton regarding occupancy levels
Action Plan Strategy • Focus on Value • Focus on high visibility, lower cost repairs and refurbishments • Build on strengths of programming to enhance community • Develop enhanced reporting tool to analyze Allerton occupancy
Action Plan Implementation – FY07 • Price Freeze on rent at $690 for 2BR and $660 for 1 BR • Huge increase in marketing via Departmental View Book, and Web Page presence (focus on value, community, and convenience) • New signage, basketball court refresh, new model room, advocate to university for increased attention to grounds ($30k), painting and rust abatement. • Monthly Unit (MU) reporting for enhanced data analysis • Reduce heating costs through education
Results – FY 2007 • Occupancy Rate – 74.8% • Highest Monthly Occupancy Rate – 84.4% • Lowest Monthly Occupancy Rate – 57.4% • Total Revenue - $1.012 Million • Highest Monthly Revenue - $98,327 • Occupancy change from FY06 – (2.8%) • However, the decline was lowest in past 3 years
Additional Value • Task Force already had ended • Still focusing on the value equation • Wanted to reduce turnover and increase occupancy; how to get people to stay? • Provide monetary incentives for renting at Allerton but Residence Services couldn’t afford to reduce rent; therefore idea for home equity program evolved
Books to Bricks Program • Home Buying program for Allerton Residents • Partnership with Century 21 Prestige Realty – large presence in NE Ohio • Residents earn equity credits by signing and renewing a lease, and also earn monthly credits • After residents graduate or leave Allerton Apartments, they may exchange their accrued equity credits towards the down payment on a home • Must use Century 21 Prestige Realty as their buying agent
Up to $1,000 towards purchase of home Good for up to 4 years after moving out Reduction of “brain drain” of NE Ohio Discounts for moving Educational Home Buying Programs: Mortgage Basics Title Basics Home Inspection Basics What is Books to Bricks?
How It Works… • 1 credit = $1 • 300 credits for signing/renewing lease • 20 credit for each month of residency • 540 credits earned after one year • Credits good for four (4) years after moving out
Home Sales Price $0 - $49,999 $50,000 - $89,999 $90,000 - $139,999 $140,000 - $189,999 $190,000 - $249,999 $250,000 & up Allowable B2B Credits $0 $300 $500 $700 $850 $1,000 Home Buying Credit Scale
Benefits to Real Estate Partner • Steady pipeline of potential buyers (over 200 leases signed per year at Allerton) • Develop relationships with residents now (home buying seminars at Allerton) and in future (long-term relationships, referrals) • Exclusive realtor for Allerton Apartments • SMART BUSINESS – Commissions on a $150,000 house total approximately $4,500 - $9,000 for the agent/broker (split evenly). After equity credit of $700 there are still significant earnings
Benefits to KSU and Residents • Residents earning important dollars for home purchase • Rent money isn’t being “thrown away” • Residents stay in area to stem “brain drain” in Ohio. (important strategic initiative by KSU President) • Stabilize and potentially grow Allerton occupancy
July 2007 – Great Expectations • Rent frozen again at $690 for 2 BR and $660 for 1 BR • Two new large apartment complexes begin construction near Kent campus • Books to Bricks program implemented July 1, 2007 • Occupancy at Allerton plummets to 2 year low of 54%
Onward – FY08 • August Occupancy – 66.8%; this was 5.9% less than August 2006 • September Occupancy – 91.7%; this was the highest monthly rate in over 2 years • September revenue eclipsed $100,000; first time in over 2 years • First time any building was 100% occupied in a month
Books-to-Bricks Kick-Off September 5, 2007 • Official Kick-Off to Books to Bricks was introduced to Allerton residents. • Covered by campus Newspaper • Covered by campus TV-2 • Reps from Century 21 Prestige Realty Group • Reps from Residence Services Virginia Edwards of Century 21 Realty talks with Allerton residents about the new program designed to help them purchase homes of their own at the "Books to Bricks" picnic last night. Photo by Leslie Cusano | Daily Kent Stater
Educational Programming • Century 21 and their Associates Presented • Anything and everything to know about buying a home • Mortgages • Title Company • Home Inspections • 1st Program held on Thursday, March 27th
Results through April 2008 • YTD Occupancy – 85.9%; this is 8.5% higher YTD than FY07 • Individual Bldg Occupancy ranges from 80.7% to 91% • Seven straight months of over $100k revenue • Estimated FY08 Revenue is $1.15 million vs. $1.012 million last year.
Books to Bricks Data • Over 250 residents enrolled • Approximately $110,000 in credits have been earned by residents • Interest in program appears strong as at least 4 residents have met with C21 Reps to discuss home buying options • It will take a few years to quantify actual conversions of student residents transitioning from Books to Bricks
Establishing a Realty Partnership • Our focus was keeping residents in NE Ohio; so it was important to select company with strong local ties • Wanted a well-respected company with national affiliations if possible • Have a business plan; demonstrate the benefits of a partnership with detailed financial analyses • Know what you want and expect out of the relationship, but be open to the expertise that the realty firm offers
Costs of Books to Bricks • Basically just the labor costs of two Residence Services employees to set up and administer the program • Only hard costs were the printing expenses for brochures - $1,500; and refreshments for home buying seminar • C21 paid for all marketing design costs, food and drink for kick-off party; time and labor of real estate experts
Key Points • Obtain administrative permission inside and outside of your housing program • Obtain the blessing of your general counsel/legal officer before entering into an agreement or offering this program • Marketing – sooner the better, and keep interest piqued with periodic award certificates, seminars, newsletter pieces, reciprocal web site links, etc.
Key Points • Structure program to encourage lease renewals; it takes 2 years to earn $1,000 B2B equity credits • Maintain regular communication with your realty partner; invite them to present a program on home buying basics to residents • Select a partner who is genuinely interested in the program and understands that a multi-year commitment is necessary (e.g. – B2B credits are good 4 years from date of Allerton departure)
Future Possibilities…? • Expanding to Traditional Residence Halls (students and their parents?) • Expanding to University faculty and staff
Submitted by:Brian Hellwig received his undergraduate degree in Political Science from Heidelberg College and earned his Masters in Higher Education Administration and Student Personnel from Kent State University where he is currently employed in the dual roles of Apartment Manager for family and student Rick Schneiderman received his undergraduate degree in Accounting from the University of Akron and earned his Masters in Public Administration from The Ohio State University. He has over 13 years in Higher Education Budgeting and Finance, including the last four years spent as the Senior Fiscal Manager in the Department of Residence Services at Kent State University
Books-to-Bricks Any Questions? Brian and Rick would be happy to answer any questions you may have regarding this program. email@example.com firstname.lastname@example.org