It’s nearly that time of year—when student housing owners and operators are preparing for the busiest season and the dreaded turnover. While conventional apartments have the luxury of spacing out turnovers throughout the year, student housing turns occur in a span of about two weeks. Compounding this, with about 60 percent of the units in student housing turning over at the end of July, approximately the same amount moves in during early August.
Because conventional apartments do not have the same volume of units turning over all at once, they can typically be turned by in-house maintenance staff, whereas student housing residences need to hire outside vendors, points out Miles Orth, executive vice president and chief operating officer of Campus Apartments Inc., which has a 30,000-bed portfolio throughout 24 states. “If you’re talking about an apartment community turning zero to 20 units in a month, that oftentimes can be done with the on-site team….because there are machines and systems today where relatively inexperienced people can do the work,” he tells MHN.
“If you’re used to spreading that cost of turn over 12 months based on rolling turns, to have that cost concentrated in the third quarter and not be prepared for that can have a huge loss on [your] income statement, so you need to manage cash to have so much loss incurred in the third quarter,” Orth asserts. (Speaking of costs, the industry average for turning student housing, according to Orth, is about $135 to $165 per bed. Campus Apartments’ average is $140-$145, mostly due to its vendor negotiations.)
Because of the short timeframe available to turn over the units, student housing owners and managers need to start their negotiations with their vendors early on. Campus Apartments, for example, begins to plan for the upcoming season’s turnover in February, during a relatively slow time.
“Your ability to negotiate is stronger the earlier you do it, so from a planning perspective, we have ironed out our contracts” early on, notes Orth. “The key is issuing RFPs to vendors so they know you’re soliciting bids. You never [want to] establish a situation where you keep using the same firm,” automatically; rather, you want to negotiate for your best price each year, and the earlier this is done, the more leverage you have.
It is also key to ensure the liability of said vendors, points out Jamie Swick, vice president of sales, Blue Mardon Inc., which supplies furniture for residential and commercial projects nationwide and whose primary focus is student housing.
“Liability of your vendors is a big element,” she points out. For example, “you need to be able to trust painters to go in [during the] allotted time frame, because if the painter is a day late, that can throw off everything.”
But simply hiring your vendors and ensuring they are responsible isn’t nearly enough in a student housing community. Preventative maintenance, for example, is key to ensuring the turnover process goes as smoothly—and quickly—as possible.
Campus Apartments, for one, begins to plan its turnover process six months before the turnover period itself actually begins, starting with a total key audit of the property. In addition, the company performs quarterly unit inspections to identify unit repairs early on, explains Orth. During this time, Campus Apartments assesses any damages that require repairs and bills residents accordingly, which tends to reduce damages accumulated at the end of the year—particularly after residents receive that first bill. The company also inspects units in February and May, and again at move-out. The repeated inspections, Orth has found, has led to a reduction in repairs required during the busiest time of the year.
As the turnover process itself begins, on-site maintenance staff needs to “understand the importance of move-out reports,” Swick tells MHN. “Not enough importance is placed on that—that’s where owners can recapture losses.”
After the report is complete and keys are collected, management should perform a detailed inspection of the apartment—of everything from floors and walls to ceilings, lights and cabinets—to determine the level of work that needs to be done, not only in each unit, but also in each individual bedroom, since student housing communities are leased on a by-the-bed basis.
Before the work begins, Campus Apartments shows their contractors the level of work they expect to be performed by introducing them to a “clean and perfect” model apartment, typically shown to prospects, in the building, “so there is no confusion as to our expectations,” Orth notes.
And to make sure that the work is performed to its standards, Campus Apartments has a policy in place in which it must sign off on each unit before a contractor moves on to the next. “Because there are so many units turning at the same time, and the contractor’s objective is to move as fast as he can…we manage the approval process to make sure it’s meeting our satisfaction,” Orth tells MHN.
One method that Campus Apartments has in place during this process is a color-coded system, in which a piece of paper at the door of the unit identifies what work needs to be done in each bedroom and/or unit. This is helpful not only to management but also to the contractors themselves. And if a resident is still in the unit, he will know exactly what type of work to expect to be performed in his apartment.
One of the biggest differences between student housing developments and conventional apartments is that the former is leased on a by-bed basis, so turnovers may, in some cases, be performed by the bedroom. As a result, communities may be faced with a situation where one bedroom needs to be turned for a new student to move in, while other students are still occupying the remaining bedrooms of a particular unit.
In these situations, the key is communication—residents must be alerted to when maintenance will be accessing their units and who will be gaining access to said unit, says Orth. In student housing, in particular, management should try to work around the students’ schedules, so as not to disturb residents who may be studying for exams.
And while many companies are increasingly using green cleaning products and low-VOC materials, Orth recommends that work be performed when residents are not around. “Our preference is for [residents] not to be there” while work is being done, which usually takes place between 9 and 5:30, when students are in class and/or on campus. (One other easy eco-friendly strategy when turning over student housing units is to donate all left-behind belongings to a local charity, to maximize best waste management practices.)
With all the work involved during this time, Campus Apartments, like other student housing managers, expect all-hands to be on deck. But, to make sure its team is having fun, the company brings in treats—including massage therapists—for the staff to make it somewhat more enjoyable. “It’s hard work and there’s a lot going on, but we want to make sure it’s a fun time, so that’s crucial for us,” Orth acknowledges.
Photo: From top to bottom, Star Pass in Tuscon, Ariz. (University of Arizona); College Row in Lancaster, Penn. (Franklin & Marshall College); Ram’s Pointe in Fort Collins, Colo. (Colorado State University).