Tag: Occupancy

If you perform a Google search for articles relating to the positive effects of pet ownership as we age, you’ll be served up just under 3.4 million results. Obviously, we have significant evidence that pet ownership can have an impact on our health and well-being, no matter how old we are. Yet, for a variety of reasons, many aging services communities don’t allow pets of any sort, or place severe restrictions on pet ownership. This made us curious — what’s the impact of not allowing pets on a community’s marketing efforts and occupancy?

During our Google search, we came across an article from pawsperouspets.com titled, “Retiring with Your Pet — Are Pets Allowed in Retirement Communities?” In the article, the author lists several hoops that retiring pet owners may face when trying to move to a community. Restrictions on the size of the pet and its age are fairly common; communities usually prefer smaller pets that are a bit older. Also, most communities require an additional financial deposit. But what really caught our eye was requiring a social screening of pets, including trial periods.

Trial periods and social screenings are a great idea. By having all current residents meet the pet, and having a professional screen the animal, you are creating a policy that should help to weed out potential issues. But what kind of marketing message is this sending? We think it’s both positive and negative.

On the positive side, by having a well-established and written pet policy, you can prevent any anxiety that residents and potential residents may have around animals in the community. Not everyone likes cats, dogs, birds, rodents or lizards. Thus, establishing a clear policy and guidelines helps to keep everyone on the same level. However, there can be a downside to these policies as well.

Discriminating against pet owners could be costing you sales. According to the American Humane Society, the average income of pet owners is higher than non-pet owners — and we all know how important income qualification is for retirement communities! Also noted is that the average length of occupancy for pet owner is more than twice that of non-pet owners. Obviously, those are some good reasons to encourage pet ownership, as it could have a positive effect on your bottom line.

Let’s face the facts: The chances that someone is going to voluntarily give up a beloved family pet to move to your community is pretty slim. If his or her dog is 35 pounds, and you only allow pets up to 25 pounds, that puts the potential resident in a predicament. In fact, the American Humane Society reports that 50 percent of all dogs in the U.S. are over 25 pounds, the common weight restriction found in rental contracts. These kinds of situations generally end one of three ways — with you losing a sale, a couple being forced to give up an animal, or someone fibbing about a pet’s weight. It’s reasonable to say that none of these options are win-win outcomes. With divorce among Boomers increasing, we’ve seen firsthand that someone may leave their spouse, but they will not leave their pet just to move to your community. So, what can you do?

With this problem in mind, the American Humane Society rolled out a campaign aimed at helping pet owners and property managers find some common middle ground. We, at Varsity, especially appreciate the detailed list of common misconceptions about pets and their owners. It’s a great resource for aging services communities — and one that you should check out.

Click here to read the article.

If you haven’t reevaluated your pet policy in awhile, now is a great time to do so — especially with the summer sales season quickly approaching. Contact our team today, and we’ll be happy to share with you some best practices for pets and discuss how adjustments in your policy could help you increase occupancy — and maybe even fill those tough-to-sell floor plans.

Sources:

http://www.humanesociety.org/animals/resources/pets-are-welcome-renting-with-pets.html

In the aging services space, especially as it pertains to retirement community and rehabilitation services, 90 percent occupancy is an important benchmark. If you look at occupancy rates from key sources, such as NIC and Zeigler, you’ll find 91 percent to be about average as of late. At this level, most organizations have their costs covered and are probably in the black financially.

However, many organizations struggle to get above the 90 percent mark for a number reasons, including resident turnover, the time needed to remodel apartments and cottages, and the lead time it takes for a new resident to sell his or her house and move in. Thus, 90 percent has taken on the air of acceptability.

At Varsity, we strive for 100 percent occupied and reserved — not just because it sounds nice, but because that remaining 10 percent can be the difference between new community development, community improvements, higher wage increases and increased resident and staff satisfaction.

Let’s look at it from the financial standpoint first. For this example, we’ll start with a community that has 100 residences: 60 apartments and 40 cottages.

The apartments generate $1,000 a month in profit over and above costs for service, while cottages generate a similar $1,500 per month. (For simplicity, we’re going to disregard entrance fees, contract types and other mitigating factors that could cause confusion.)

This means that, during a single year, the apartments generate $720,000 of pure income, with the cottages creating an additional $720,000 — for a total of $1.44 million per year in profit.

Now, let’s look at the impact of an occupancy rate of only 90 percent each month — meaning that 10 of the 100 residences are unoccupied.

Seven empty apartments = $7,000 in lost income

Three empty cottages = $4,500 in lost income

That’s $11,500 in lost revenue each month, or $138,000 each year! While this a simplistic example, we think it’s important to realize just how much financial impact that 10 percent can have each month.

We do realize that true 100 percent occupancy isn’t sustainable. So, let’s imagine if your team can reach 95 percent occupancy consistently each month — an increase of only five percentage points. Now, you’re only leaving 5 percent of that revenue on the table. That’s an additional $69,000 in yearly income, which can still have quite an impact on the bottom line. It is that additional revenue that will help spur new community growth, provide increased wages and enable staff to address resident satisfaction concerns in a proactive way.

So, how do you tackle the challenge of selling that remaining 10 percent? In our next post, Jackie Stone, our VP of sales consulting, will share some of her insights for overcoming the 90 percent plateau that will help drive your community to be 100 percent occupied and reserved.