In the last decade, real estate development in Ghana has on the ascendency, particularly the building of apartment.
Apartment complexes have become an increasingly popular choice due to their ability to accommodate a larger number of residents in a limited space. Compared to standalone houses, apartments generally have lower selling prices and considerable maintenance costs. This makes them an attractive option for individuals with limited budgets. Even though these housing arrangements are considered as affordable housing, there is currently no element of “affordability” within the existing structure.
Amenities such as swimming pools, fitness centers, and communal spaces for socializing, secured entrance and exist with 24/7 security personnel have contributed to an increase in the total cost of ownership and maintenance of apartments.
TYPES OF APARTMENTS
There are many options available when seeking the perfect residential space to call home especially for persons who do not wish to go through the stress embedded in the process of property acquisition, from land purchase through to erecting a building on the property. Many prefer to purchase or rental apartments. Apartments come in various types and sizes, ranging from studio units to multi-bedroom penthouses. The choice of apartment type will depend on factors such as budget, lifestyle preferences, and the number of occupants.
Perhaps the most compact yet cost-effective is the studio unit - a comfortable single room that consolidates living, dining, and sleeping areas. Ideal for solo occupants seeking an affordable resident.
A popular choice for couples or roommates is the one-bedroom flat. In addition to a bedroom, these units commonly include an open concept living and dining room plus full kitchen. Perfect for growing independence.
Also, there is an option of multi-level townhomes and penthouses which offer elevated living at the top of a building. Soaking in magnificent views, this light filled residences often incorporate multiple bathrooms and lavish amenities fit for lavish lifestyles.
High-rise apartment structures have also become a common solution for maximizing available space in coveted city centers. This may however not suit all lifestyles equally. Vertical living comes with its own unique challenges like relying more heavily on elevators. While the views and amenities of highrise towers appeal to many seeking the excitement of city conveniences, the living conditions require an acceptance of reduced privacy and potential distractions that lower-level units may better accommodate.
Occupancy rate in these rented properties is the benchmark for gauging the percentage of occupied units against the total available. Determining the optimal rate hinges on various factors, including property location, competition, and demand, directly affecting property value and rental yields.
SOME EFFECTIVE MARKETING STRATEGIES TO INCREASE OCCUPANCY
Occupancy rates are not just mere numbers; they are indicators of a property’s profitability. High occupancy rates often signal a robust rental market, potentially leading to increased profitability for landlords and property managers. Conversely, low occupancy rates may highlight issues with the property or its management, affecting the anticipated cash flows and, by extension, the financial health of the investment.
Exploring strategies to boost occupancy rates involves approaches, ranging from effective marketing strategies and tenant retention efforts to property upgrades and competitive pricing. These measures not only enhance the allure of rental properties but also foster a more fruitful relationship between property owners and their tenants, ultimately leading to improved rental yields and property value.
Here are some recommended strategies:
- Adapting to Market Demands: Adjust marketing for low demand periods. Identifying off-peak seasons and tailoring marketing efforts accordingly is crucial. Property managers should strategize and allocate resources to attract tenants during these times when demand is typically lower. It will be best to adjust prices to fit economic situations. Additionally, researching local market conditions to ensure competitive yet affordable rent pricing while maintaining fairness will be key. Implementing dynamic pricing strategies is essential in today's competitive rental market. By adjusting rental rates based on seasonal demand, market fluctuations, and vacancy rates, property owners can maintain a competitive edge.
The following may be helpful in achieving this outcome.
- Utilize property management services to assess the local rental market continuously, monitor market trends, and adjust rental rates accordingly. This ensures properties are priced correctly, maximizing income while minimizing vacancy times.
- Offering enticing deals and packages can make a property more appealing. These could include lease renewal incentives like rent discounts or unit upgrades, complimentary amenities to encourage tenants to stay etc. Tenants should also be allowed to make minor customizations to their units, fostering a sense of home and personalization.
- Provide flexible lease terms, including month-to-month options, to accommodate tenants’ changing circumstances.
- Enhancing Online Presence: In today's digital age, a user-friendly, mobile-responsive, and SEO-optimized property website is essential. Ensuring that the property's website ranks higher in search results and provides a seamless browsing experience can significantly increase visibility and attract potential tenants. Also, as digitization has become the norm of the day, so has deceit. As much as there is a shift to digitization, it is essential to describe these rental properties as accurately as can be to avoid any issues of deception. Deception can ruin your business entirely.
Also, these platforms should be regularly updated, remain active and engaging through interactive posts, and targeted advertising on social media platforms to effectively build brand awareness and establish connections with prospective tenants. Implement online portals or mobile apps for efficient handling of maintenance requests and queries.
Encouraging reviews and referrals from current and past tenants can help build a positive online reputation and attract new tenants through word-of-mouth marketing.
- Building Relationships: Implementing loyalty programs or offering special rates to past and long retained tenants can encourage retaining tenants and foster long-term relationships. Satisfied tenants are more likely recommend the property to others.
Partnering with nearby businesses can provide mutual benefits and increase visibility for apartment owners. This can come to play by Apartment A’s management identifying a highly frequented restaurant in the same neighborhood as the apartment. The location of the restaurant to partner with is necessary especially for the convenience of tenants or potential tenants who will receive referrals from the restaurant.
This arrangement can be agreed by both the restaurant and the apartment manager where the restaurant will provide all new tenants or long retained who have stayed in the property for a defined number of years with coupons for discounted food, or to strengthen social bonds, the apartment owner can collaborate with the restaurant to organize movie nights or fun events which will be appealing to potential tenants. This collaboration can be strengthened by both businesses sharing complimentary social media platforms and posts to cross- promote their brands and services. Through creative cooperation like this, property managers and local businesses can successfully promote each other for mutual benefits. Strong community ties are formed when local partners work together.
Attending to the needs of tenants is also crucial. People generally want to be heard and attended to when they are encountered with challenges. In the apartment business, people really matter. Responding timeously to feedback and addressing concerns can further strengthen relationships and establish trust. Foster a positive tenant-landlord relationship through clear, transparent communication and prompt response to concerns.
By implementing these strategies, property managers and owners can effectively increase residential rental occupancy, adapt to changing market dynamics, and create a positive experience that resonates with both current and prospective tenants.
- Investing in Property Upgrades: Investing in property upgrades is a strategic move to increase residential rental occupancy, enhance property value, and attract a higher caliber of tenants. This strategy targets a specific market, however, within a highrise apartment plan for instance, there should be a blend of apartment types to accommodate all classes. Here's a focused approach for property upgrades:
- Interior Renovations: Focus on kitchen remodels, bathroom renovations, and modern flooring to instantly boost appeal.
- Technology Integration: Upgrade to smart home technology, including energy-efficient appliances and high-speed internet, catering to tech-savvy tenants.
- Outdoor Enhancements: Adding decks, patios, or landscaping, a general garden can enhance the property's curb appeal and usability.
- Sustainability Initiatives: Implement energy-efficient appliances and solar panels to attract eco-conscious tenants.
- Safety and Security: Invest in modern security systems to ensure tenant safety and peace of mind.
- Aligning with Market Trends: Stay updated with in-demand amenities to remain competitive and satisfy tenant expectations.
- Allowing a co-tenant arrangement in an apartment space: There are a number of people interested in jointly having rights to an apartment space. Co-op arrangements foster a built-in support system through mutually invested roommates. Residents gain both the financial benefit of shared expenses within controlled community environment tailored to their needs.
While traditional leases typically only recognize one primary tenant as legally responsible for the rental agreement, some progressive property managers are exploring alternative co-rental models that can benefit groups of friends or roommates.
Let's say four low income earning colleagues want to share an apartment near their jobs. Under a traditional lease, only one would technically be the tenant. However, with this arrangement, where a property manager agrees to a cooperative rental model, the four colleagues would jointly sign the lease as co-tenants. They divide responsibilities democratically, one oversees payments, another handles maintenance issues, etc. Rent is split into four equal shares, each month, either the colleagues pay their portions directly to the landlord or into a joint account set up specifically for their cooperative rental.
In the event one roommate needs to replace or sublet temporarily to another friend, it requires group approval through a house vote. This model will give the four colleagues equal legal standing while fostering collaboration, and cost-savings. Their landlord benefits from reliable rent being paid on time each month. The key is all parties having a say as respected co-tenants.
- Considering the Rent-To-Own Scheme: The Ghanaian government has implemented various initiatives to promote affordable housing and facilitate home ownership. One such scheme is the Rent-To-Own scheme, which aims to eliminate the burden of the traditional two-year advance system and provide low-income earners with the opportunity to rent and eventually own their homes. This scheme focuses on semi-detached and detached houses and offers tenants the option to transition into ownership after a certain period of renting.
The Rent-To-Own scheme is part of the National Housing and Mortgage Fund (NHMF), which was established by the government in 2018. The NHMF includes the National Mortgage Scheme (NMS) and the Affordable Housing (Rent-To-Own) scheme. Under the NMS, participating banks underwrite mortgages at reduced rates, making home ownership more accessible to a larger portion of the population.
The Rent-To-Own scheme has several advantages for both tenants and potential homeowners. For tenants, it provides a pathway to homeownership without the need for a large upfront payment. Instead, tenants can gradually build equity through monthly rent payments, which can eventually be used as a down payment to purchase the property. When purchase time comes, they can proudly sign on the dotted line, realizing the dream of property ownership through accessible, incremental means. This scheme also offers stability and security, as tenants have the option to remain in the property long-term.
Landlords should take hold of these strategies to significantly improve occupancy rates by making rental properties more visible, appealing, and accessible to potential tenants.
CONCLUSION
Apartment ownership in Ghana offers a range of benefits, from affordability and lifestyle advantages to investment potential. The above initiatives are ways to access and maximize the value of properties. By understanding the key considerations, buyers can make informed decisions and enjoy the rewards of apartment ownership in Ghana's thriving real estate market.
Invest in your future by exploring the opportunities and possibilities of apartment ownership in Ghana. Take advantage of the growing real estate market and make your mark in this vibrant and exciting sector.
ABOUT THE AUTHOR
ADWOA BIRAGO NYANTAKYI is an Associate at SUSTINERI ATTORNEYS PRUC (www.sustineriattorneys.com). Adwoa specializes in Banking and Finance, Green Financing, Capital Markets, Projects, Infrastructure, and Construction, as well as Property and Land related legal matters. She welcomes views on this article via birago@sustineriattorneys.com