Guerrilla Marketing and Residential Rentals

 

Friends of mine who own Kunstadt Sports in Ottawa bought their first fourplex rental building last year and they did some creative things to add value for very little additional cost.

 

  1. They gave their new building a name! They did a bit of homework on the history of the building. It had been owned by the same Ottawa family for nearly 100 years and they asked for (and received permission) to name the building after the family.
  2. The building is now called “Langley Place” and they put a classy sign on the front of the building.
  3. The sign is lit because in Ottawa, the sun goes down at 4:30 pm and doesn’t rise until 7 am during the winter months so if you want your sign to be seen, it has to be lit.

 

Langley Place

 

  1. They used goose neck lighting so the sign is lit from above (it is not a sign box!) It not only looks better but doesn’t pollute the night sky further…
  2. This is on a busy road in Ottawa (Bronson Avenue) so Langley Place is bound to become a land mark.
  3. Tenants don’t live in a ‘rental building’; they live at Langley Place. They will tell their friends to meet them at Langley Place…
  4. They made sure that the building had never had a name before either—it is probably just as unlucky to rename a building as it is to rename a ship (an old sailor’s superstition).
  5. They invited the Langley family to join them in a celebration to launch the new name on site. More good karma…
  6. It is close to Carleton University so it will probably always be rented but they should get a bit more rent and attract somewhat better tenants. The latter means less maintenance and less turnover and, hence, lower costs. The cost of the sign and lights—just over $1,500.
  7. They renovated the building including adding natural gas fireplaces to each unit that made them feel very homey. The gas fireplaces were absolutely the closer on all their rental deals. The cost of the four fireplaces—$12,000.
  8. They also provided a Kunstadt Sports-branded bike free with each unit—to promote fitness, help protect the environment and differentiate themselves from every other landlord as well as promote their sports stores.

 

Kunstadt-branded Raleigh Bikes—Free to Tenants

 

  1. Those bikes are moving billboards for their sports stores and buy a lot of goodwill from their tenants and students at Carleton too. Happy news will travel the campus…
  2. Kunstadt created the house brand bikes with Raleigh to have a good quality yet inexpensive alternative to pricey street bicycles. Customers like them so much (at the $269 to $399 price range) that they sometimes buy them without even test riding them!
  3. Note that Langley Place has no parking spaces at all for cars. But Kunstadt turned a disadvantage into a selling feature by adding the bikes to the premiums they offer on all their rentals.
  4. The cost of their added differentiated value is then about $14,700 but they get rents that are on average about $75 per month higher than their competition. This results in annual increase in NOI of about $3,600 or a marginal cap rate of 24.5% p.a. on their additional investment. If their occupancy rate is say 2% higher than it would otherwise be, this would push up their cap rate too (a bit). Now that is a heck of a return and, to boot, they have better tenants, less damage, lower turnover, lower maintenance and a ton of goodwill for both their realty company and their sports stores.

 

Kunstadt Sports—Kanata and Bank Street Locations

 

Eric Kunstadt,

President, Kunstadt Realty

 

Copyright. Dr. Bruce M. Firestone, Ottawa, Canada. October 2006.

 

www.kunstadt.com

 

www.OttawaRealEstateNews.ca

 

www.DramatisPersonae.org

 

www.Exploriem.org

 

Dr. Bruce M. Firestone

B. Eng. (Civil), M.Eng.-Sci., PhD.

Real Estate Sales Representative

Metro Suburban Realty Ltd.

613.723.2222 x 229 w

613.723.2345 fax

bfirestone@metro-sub.com