Property managers must always think about the type of tenant that is most likely to reside in that particular
building. For example, when apartments in a project rent for lower monthly amounts per year, tenants will be
concerned primarily with shelter. This means a safe, clean, efficient building but without frills and amenities.
On the other hand, if the apartments will rent for the highest amounts per year, for that area, tenants typically
expect and demand much more than just shelter. These tenants want a luxurious life-style, and that means the
building may contain a health club, a swimming pool, a private park, and similar conveniences.
Things That Matter
In the lower priced units, investors will concentrate more on the basic design and layout of each apartment and
on the reliability of such things as the elevator service and the garbage disposal. For common areas, the
workings of the lobby intercom system and the location of the mail boxes, for example, are prime
considerations.
However, at the more fully equipped building, the investor faces increased costs of construction and
maintenance of areas that produce not direct rental income. If these life-style areas become the slightest bit
shabby, it can lead to tenant dissatisfaction and vacancy.
In the life-style buildings, turnover and subleasing is more prevalent because the kinds of tenants in the
buildings are more apt to seek to “improve their life-style”. This means that they are more likely to move along
to the next newer and more luxurious building that is constructed. Nonetheless, the well equipped, well
maintained building usually has a very low vacancy rate. In fact, it often has a waiting list of prospective
tenants that assures full occupancy for a long time in the future–a good sign for investors.