Chadds Ford Apartment Proposal

December 11, 2014

CHADDS FORD
BUSINESS RESEARCH REPORT

PREPARED BY:
Jonathan Smith
Lauren Whitley
Logan Fee
Matt Loveland
Tanner Neilson

Submitted to
Professor J. Matthew Clarke
December 11, 2014

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Chadds Ford Apartment Proposal

December 11, 2014

TABLE OF CONTENTS
Executive Summary. 3
Move Out Analysis 4
Marketing Recommendations. 5
Financial Analysis6
Resident Analysis7-8
Comparison of Apartment Complexes9-10
Conclusion10

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Chadds Ford Apartment Proposal

December 11, 2014

EXECUTIVE SUMMARY

The Chadds Ford apartments were built in 1985. They are named after Chadds Ford, PA where one of
the investors was from. Since the building has been built there was a housing boom in the 1990s so
there were sixteen new town homes built in 1995. In 2005, the swamp coolers in each of the units were
upgraded to central air to make a more comfortable environment for the tenants. Appliances, carpet,
and linoleum also are improved as needed. Before each move in there is new paint, a professional
cleaning, and other maintenances performed.
We have assessed that these things could also be renovated: parking, cabinetry, appliances, counter
tops, and lighting. Upgrades such as these will enhance a modern feel to the units and catch the eye of
the tenants. Tenants are consistently looking for places to live that they are proud of. These upgrades
can enable more opportunities to increase the occupancy.
Throughout the marketing portion of our research we explored the strengths and weaknesses of the
following areas: Internet relevancy through SEO Keywords, advertising on the dominant apartment web
searches, onsite advertising, and overall website usability. Based on our findings, we have formulated a
summary for each portion discussed on how Chadds Ford can increase their visibility to reach
prospective tenants.
The research has information about competing apartment complexes. They are complexes nearest to
Chadds Ford Apartments and where potential renters will be looking at to make their decision on where
to live.
We have calculated the average rent per unit and created a table that displays both monthly and annual
revenues. In our financial analysis we have provided accurate accounts of the finances involved in the
complexes. These help show that the renovations we have suggested could potentially bring in more
profit over time.

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Chadds Ford Apartment Proposal

December 11, 2014

CHADDS FORD MOVE OUT ANALYSIS

One faucet of our research had to do with learning the reasons why residents are moving out of Chadds
Ford apartments. This research lead us to look into the past resident files to determine why residents
leave. We came up with some interesting results. Below is a table for the breakdown of the reasons
why:
Overview:

45 YTD Move outs

Out our control: 22%

Application Screening Issues: 13%

Missed Opportunity: 78%

Up Sale Potential: 33

Turnover Problems
Our research indicated some interesting results. Upon first review we can see that for a property the
size of Chadds Ford apartments we are seeing a really big turnover rate. It is a rate of 39% through 10
months of the year. If the trend continues for November and December we can expect that number to
be close to 50%. Of competing complexes in the area we have determined this to be on the high side for
the area. This is a major area for improvement which our proposal helps to remedy.
Application Screening Issues
Secondly, we can see issues with application screening. The 13% for application screening issues
includes, evictions, skips, and non-renewals. Its difficult to assess the average number of these cases in
other properties, but from our preliminary research this number is much too high. Its difficult to
imagine Pentalon Management could be profitable by evicting 13% of its tenancy every year. Many of
these cases indicate money lost via attorney fees, collection fees, and unpaid balances and damages.
These apartments also regularly require more time and effort to turn over. We may be responsible to
hold property or dispose of trash. All this things cause more time to be taken and less time with paying
residents in these units.
Up Sale and Missed Opportunity
Finally, we have determined that 78% of the move outs (all but 10), indicate a missed opportunity by us
as a company. Better management, facilities, marketing, or price could have had an impact in keeping
these residents and in avoiding vacancy. The 33% that we have identified as up sale potential is a
particularly important number we believe we can influence in our favor. Chadds Ford is lucky enough to
have apartments of all sizes, studio to four bedroom townhomes. We believe keeping a good resident is
paramount at a property like Chadds Ford which has trouble finding applicant who are approved. In this
proposal we will discuss how we are going to tackle finding ways to keep these residents by finding
suitable arrangements for them in Chadds Ford.

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Chadds Ford Apartment Proposal

December 11, 2014

MARKETING RECOMMENDATIONS

Thirty years ago, an effective marketing plan meant that you had signs in front of your unit that were
easy to see and that you had ads in the phone book, the local paper, and in the print guides. You could
do other unique things to make yourself stand out a bit, but you had to be in the prints and have good
signage. Since the early 20s, marketing has drastically changed.
Now for a business to thrive they must have an evolving marketing plan with a strong online presence.
Keep in mind, increasing the marketing budget is not a marketing plan.
Murray Apartment Searches
Apartment searches start on the internet. With some preliminary online searches on Apartments.com,
Google, Craigslist, and KSL, Chad Ford Apartment received no hits for either the Murray, UT area or
Murray Apartments.

Listing with these sites would offer additional opportunities for prospective tenants to consider Chadds
Ford Apartments in their home search.
SEO Keywords
Google is the largest used search engine today. Google has set a standard for appear on their top search
list through SEO Keywords. SEO Keywords give Google the opportunity to match a customers search
with relevant matter in your website. SEO setup will be an inexpensive way to boost searches on
Pentalon Management website for Chadds Ford and their other properties.
Mobile Website
Smart phones are the new laptop. Phones now allow consumers to research in a relaxed setting
regardless of they are on the go or simply at home. Consumers need confidence before they will buy
into a product or service. Having a Mobile website will help potential residents perform research. Having
a better research base will increase the new client pool.
Marketing Conclusion
Based on our findings, we recommend Pentallon to ramp up or include the following: SEO Integration,
Mobile Website Optimization, increased offsite signage, and increased ad placement on KSL, Craigslist,
and Apartments.com. These are merely inexpensive suggestions for Management on how to increase
awareness of the Chadds Ford Apartment Complex.

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Chadds Ford Apartment Proposal

December 11, 2014

FINANCIAL ANALYSIS
Unit Breakdown
Unit
Type

Number

% of total

Cost

Studio

12

13%

649.00

1 Bed

12

13%

749.00

2 Bed

36

39%

859.00

3 Bed

12

13%

1,049.00

3 Bed *

12

13%

1,159.00

4 Bed *

9%

1,469.00

Weighted Average (WA):

822.53

* Designates a Town House Unit

Turn Over Costs
2 weeks lost at WA
rate

378.59

Paint

200.00

Carpet replacement

3,000.00

Labor (1 day at $14 hr)

112.00

3,690.59

Total Turn-over cost:

Monthly WA
Retainings

Units

Yearly total

1,645.07

19,740.78

3,290.13

39,481.57

4,935.20

59,222.35

6,580.26

78,963.13

As the above examples show the cost of unit turnover is over $3,680.59. If you have only 10 units
turnover per year that still leads to a loss of over $36,000. Also, four units rented at an average rate
of $822.53 a month over the span of 12 months adds up to a revenue increase of nearly $40,000.
Due to the impact of high turnover/low retention rates, measures should be taken to retain those
tenants, increase revenue, and minimize loss. The methods our Business Communications group at
SLCC are proposing is upselling, via informative brochure, and understanding the reasons tenants
are vacating. This will allow management to make informed decisions to increase tenant retention
and reduce vacancy.

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Chadds Ford Apartment Proposal

December 11, 2014

CHADDS FORD RESIDENT ANALYSIS

We conducted a resident survey to determine the strengths and weaknesses of the complex. It
was necessary for us to do this for a number of reasons. First we wanted to get an idea of the things
Chadds Ford does well, second we needed to know what needed improvements, and third to get an idea
if people were planning on moving or not. We cannot say that the survey represents 100% of the
residents feelings it does give us a great place from which to start drawing our conclusions.

Things Chadds Ford is Getting Right

Floor Plan

Manager

Condition of Units

Flooring

Counter Tops

90% Mentioned
this as a positive

75% Also listed

this

90% were
satisfied or very
satisfied

75 % listed
flooring as Good

80% listed
countertops as
good.

You can see from the breakdown above that there are several things going very well. The floor
plans and manager were unsolicited mentions by the residents for those two items. This tells us that
overall Chadds Ford has great floor plans, and that Cassie the manager is an asset.
Mentions the overall condition, flooring, and countertops were three of the five areas of in unit
things we wanted to ask about. All of them were received very well and had a value of good the
highest rank allowed by the survey.

Areas Needing Improvement

Parking

Price point

Snow removal

Quality of
appliances

Lighting

100% not satisfied

50/50 on this one

a number of
mentions

another 50% not

satisfied

A number of
mentions

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Chadds Ford Apartment Proposal

December 11, 2014
A number of rectifiable issues were present in the things that need improvement area. The big
item on this list, that frankly was surprising, was the parking issue. This may be where we can improve
the most as a complex. Not a single survey came back that didnt have something to say about it. We
see this as mainly a management issue. Although adding more parking would be nice, another way to
approach the issue would be with better management. Making sure there are no abandoned or
inoperable cars on the property is a good way to start, then limit the number of cars for every
apartment to the number of lease signers. Lastly a simple window sticker or tag, could make it easy to
tell which cars belong to whom and how many every apartment has.
Most of the other issues were mentioned significantly less than the parking one. However
noticeably absent from the list of positives or negatives were the maintenance staff and leasing agent.
Our guess is that, due to recent turnover at those positions many are not acquainted or familiar with
them. Further explaining to the residents how the staff can help enrich their stay may be a good way to
further retention efforts.

Assessing Turnover for the Future

The final portion of the survey was to determine future turnover. Most were staying or
undecided making up 90% of the surveys we got back. This is a great number if it holds true. However
we feel like only people motivated enough to fill out a survey were those who had an interest in
improving the apartments for a longer stay. We cannot assume that turnover will decrease if we have
done nothing to help the turnover cause. That is why it is imperative to figure out ways we can help
address the issues raised in these surveys.

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Chadds Ford Apartment Proposal

December 11, 2014

COMPARISON OF APARTMENT COMPLEXES IN THE AREA

Complexes in the area

The three apartment complexes that are closest to Chadds Ford are Royal Ridge Apartments (who took
over Eastridge Apartments), Pinehurst Apartments, and Creekview Apartments. All of these complexes
in the area have a swimming pool, clubhouse, and professionally landscaped exteriors. These are
attractive amenities for potential renters.

Pricing of Complexes
All of the apartment complexes vary in size and price.
Royal Ridge Apartments:

1 bed 1 bath - $749 - $889

2 bed 2 bath - $889 - $999
3 bed 2 bath - $1079 - $1300

Pinehurst Apartments:

1 bed 1 bath - $929

2 bed 2 bath - $1159
3 bed 2 bath - $1329

Creekview Apartments:

1 bed 1 bath - $720 - $850

2 bed 1 bath - $840
2 bed 2 bath - $960
1 bed 1 bath (renovated) - $775
2 bed 1 bath (renovated) - $885

Advantages of Chadds Ford

Pricing & Size: Chadds Ford Apartments are much less expensive than the surrounding apartment
complexes. There also is more variety in the size of apartments available, ranging from studio to four
bedroom townhomes. This is a key selling point that renters need to be aware of to know that their
different needs can be met at Chadds Ford.

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Chadds Ford Apartment Proposal

December 11, 2014

Disadvantages of Chadds Ford

Website: www.chaddsfordapts.com is not as pleasing to the eye as competitors websites are. The other
complexes have more photos of the interior which make the complexes look much more appealing.
Renovated interiors: many of the competitors are updating their complexes and have faux wood, crown
molding, and designer accent walls. The competitors are taking advantage of these renovations by being
able to charge a little more for updated interiors.

CONCLUSION
We welcome the opportunity to submit this proposal to Pentalon Management to help increase
retention at Chadds Ford Apartments. By the research from current tenants and researching
surrounding complexes collected, we are confident this can provide tools to make Chadds Ford the best
choice for residents.
Should you require additional information about any part of this research, please contact Tanner
Nielson, who can provide you with answers to question that may arise.
We are grateful for the opportunity we have had to conduct this research and work with The Chadds
Ford Apartments. We look forward to your decisions and continued success.

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