JF2448: Succeed in Uncertain Times with Dan Russotto #SkillsetSunday
For 10 years, Dan participated in many industries, landing him in the hospitality industry and Apartments.com. They layer a full online leasing platform that covers the entire transaction: find the place you want to live, apply, get screened, pay rent, and submit maintenance requests through the platform. In today’s episode, Dan will discuss the best practices to ensure the apartment rental business continues to succeed during uncertain times.
Dan Russotto Real Estate Background:
- Vice President of Product at Apartments.com
- 25+ years of extensive startup & Fortune 500 experience
- Based in Atlanta, GA
- Say hi to him at www.apartments.com
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Best Ever Tweet:
“One of the big things we wanted to try to accomplish with this rental tool was to ease the chief complaints of our renters, which is not having to pay multiple times for our screening and only getting a soft credit check instead of a hard credit check.” – Dan Russotto
Theo Hicks: Hello, Best Ever listeners, and welcome to the Best Real Estate Investing Advice Ever Show. I’m Theo Hicks, and today, we’ll be speaking with Dan Rusado.
Dan, how are you doing today?
Dan Rusado: Great. Thank you so much for having me on the show today.
Theo Hicks: No, thank you for joining us, and looking forward to our conversation. Today is Sunday, so we’ll be doing a Skillset Sunday, and we’ll be talking about some of the best practices to ensure that your apartment rental business continues to succeed during these uncertain times. And Dan will be a perfect person for this, because he is the VP of Products at Apartments.com. He has over 25 years of extensive start-up and Fortune 500 experience. He’s based in Atlanta, Georgia, and you can learn more about Apartments.com at https://www.apartments.com/.
So Dan, before we dive into the skillset today, do you mind telling our best ever listeners a little bit about your background and what you’re focused on today?
Dan Rusado: Sure. So I started my career first 10 years consulting, and then I caught the startup bug, I did startups for about 10 years, in all different types of industries; I ended up getting into the hospitality industry, which there’s many parallels of hospitality to multifamily rentals. I was in that space for about 5, 6, 7 years and then had this opportunity at Apartments.com, where there’s many things that they wanted to do to change the industry, closer to how hospitality works. So I took the opportunity to join.
Right now, as far as what I focus on, it’s a little bit of what you would think Apartments.com is; the core platform is, “I’m a renter and I want to go find the perfect place to live.” And then the other exciting thing that we have been layering in in that process is a full online leasing platform, where you can do the entire transaction; not just find the place you want to live, but do the entire transaction, from applying, to getting screened, to doing your lease and even paying rent, and submitting maintenance requests etc., all through the platform. So that’s what I’ve been up to the last couple of years in addition to growing traffic and making the features that renters want to be able to find the perfect place.
Theo Hicks: Great. I think that’s perfectly setting us up for the conversation today, whichh are these best practices to make sure that your apartment business succeeds during these uncertain times.
So one of the things you mentioned is that the purpose of Apartments.com is for renters to find a place to live. So I think one thing we can focus on to begin with would be the actual listing itself. So I’m an apartment syndicator, working through a property management company, or I have my own rental that I’m focusing on – what are some of the best practices when it comes to creating that Apartment.com listing to make sure I’m attracting the right tenant that is going to be in my property long-term, so I don’t have to worry about some of these high vacancy rates, or when someone does come in there; high bad debts, quick turnovers, things like that?
Dan Rusado: Luckily, we’ve been at this for quite some time even before the pandemic, on how do you best set up a listing in a way where the renter doesn’t have to feel the need to come and really scope out that property, that unit, the surrounding area. A lot of times a lot of feedback you hear is people feel like they have to do a drive-by for a particular apartment, because they don’t have a good sense from the listing of what’s happening. So the way we’ve sort of overcome that, and as you would guess, a lot of it has to do with rich media, less words, more pictures.
So for our larger properties, 300-unit buildings, we go out and take pictures, we do 3D tours, we do drone flyovers. We do all the types of things that really give contextual awareness to the renter, even down to our independent owners that are smaller properties. We recommend certain best practices around taking certain types of photos of the inside and outside; it gets you more traffic. There’s a certain count of photos that matter. But those photos, those videos and then contextual awareness of how that property or unit sits relative to its surroundings – is it near a highway? Is it next to a cemetery? What’s the view from the porch look like? What’s the walk up to the unit look like? These are all the types of things that renters want to know. And the more you can include that type of information or imagery on the listing, the better chance you’ll have a qualified lead coming through the door and the ability to convert that lead.
Theo Hicks: Let’s get into specifics. So you said that certain types of photos and a certain number of photos of the inside, of the outside… So I’m sure it varies depending on what type of product you’re offering, but just in general, when you say certain types of photos and then the count of the photos, what should people be aiming for?
Dan Rusado: So you don’t want 5 or 10, you also don’t want 70 or 80; there’s sort of this sweet spot in the 20, 25 to 40 range, where it’s the right amount of photos that renters can consume and get a good feel for that property, without feeling overwhelmed and getting tired of clicking through all those photos. And then if there’s too few, then they feel like they don’t have enough detail, that perhaps you’re hiding something about the property that you don’t want them to see. So if you get in that 25-40 range, just based on our analytics, we see that the conversion rate and the ability for a renter submitting a lead goes up. So that’s that on the photos.
And then the specific photos – there are certain types of photos. People are more interested in the kitchen and the living room, and maybe a picture of what the exterior looks like. But then you have other photos – the guest bedroom or some of the other photos you don’t necessarily want as your primary photo. And then it also varies by geography and time of year, whether there’s a pool in the summertime; it’s less important to put a picture of a pool in the wintertime, it’s not on people’s mind. So there’s all this type of choice that matters in terms of what you display to the renter at a given time and in a given city etc.
Theo Hicks: What would you say is the most important thing that someone needs to do when they’re creating a listing that maybe they wouldn’t necessarily think about or people aren’t doing right now?
Dan Rusado: I do think that video and 3D touring is critical. [Inaudible [00:09:20] thing but the thing that maybe not everyone’s doing is this more three-dimensional view. And I think furthermore on that point is helping them understand more what the unit that they’ll be actually living in will be like — many properties, many listings focus on the generic model. So it’d be akin to if I was on an auto website, and instead of showing the actual used car that I’m going to be buying and the pictures of that used car, I share stock photos of what it was new. I’m not going to want to buy a used car based on stock photos. And similarly, if you only focus in on the model-level information and don’t get into the weeds and the nuances of specific unit, it’s going to create a situation where the renter may not be able to [unintelligible [00:10:05].28] or they have to come in, etc.
Theo Hicks: I know Apartments.com has a lot of data, a lot of analytics, as you said… What is the ideal approach or some best practices that our Best Ever listeners can follow when they’re reviewing the analytics? What should they be looking at in order to, again, ensure that they are able to succeed, especially during those uncertain times?
Dan Rusado: Yeah, some of the stuff that you think matters during a pandemic… But the ultimate goal is to increase conversions, get qualified renters in. The first part of the goal is to increase the leads of people that are interested in your property or unit, and then the ultimate goal is to create a list. So if you’re always looking at metrics and seeing how they correlate to those two metrics, leads and lead conversion, you end up seeing that what you think might be something that’s important may not be so important… Whereas like the example I gave you of having the right amount of pictures or cleaning up your description or tightening up your amenities – there’s a whole set of things you could be doing that I’ve alluded to, that you can see, especially at Apartments.com, we’ve had over a billion visits in 2020 and we have a plethora of data to be able to see how this correlates to the end goal of lead conversion. So if you have your own platform, your own property and you’re trying to understand that, making tweaks to your platform, your listing and then seeing how it affects those metrics is vital.
Theo Hicks: So are you saying that there’s a way I can go on there and determine what are the best descriptions? Or are you saying more of like, trial and error on my own listing?
Dan Rusado: Good question. So for our customers, we create a report that shows all the different aspects of the page and where you can make improvements… Whether it’s lack of data, or pictures aren’t in the right spot, or the descriptions not right, or missing amenities… So we will give that gap analysis to our customers of what’s missing, and then correlate that how it affects leads and leases. So that’s something that we do and we have knowledge on, but to your point, at a minimum, doing some trial and error or testing and changing things can help you see how it impacts those metrics, if you don’t have access to that type of reporting.
Theo Hicks: Is that reporting available to anyone who lists on your site, or it’s a higher-tier subscription to get that?
Dan Rusado: Right now, that’s available to our paid advertisers. We have both some free listings and then also paid advertisers. But anybody that’s a paid customer on our site, it’s available.
Theo Hicks: Something else you mentioned was the description. Can you walk us through some of the best practices for creating the best description? What type of keywords to include, the length, things like that?
Dan Rusado: Interestingly enough, one thing that we’ve noticed is a lot of properties don’t include a description at all, which that’s obviously the worst-case scenario. If you don’t have a description, then it’s not helping you from an SEO perspective; a lot of the key points of that description is for SEO purposes, to make sure that if someone’s googling or in a search engine, trying to find a listing with your particular amenities or quality or keywords that rank highest… So making sure that you have a description at all is important.
One of the things that we do for our customers is if they don’t write a description, then we actually auto-generate a description for them based on amenities etc. And then as you would suspect, you wanna summarize some of the key amenities in that description that people care most about. The things that people care most about are washer and dryer, or pool, or there’s a list of five or 10 amenities that are searched upon way more than all the other amenities, and having that front and center is important.
But to your point, just like with pictures, you don’t want it to be a novel either. It’s got to be something that’s consumable, a paragraph or two that the renter is actually going to take the time to read.
Theo Hicks: Something else that you mentioned in the intro, the second thing that Apartments.com focuses on is trying to have that turnkey experience for the residents, so they don’t just see the rental listing on Apartments.com and then they need to go somewhere else to actually apply and set up a tour and things like that. I’m assuming there’s a reason why Apartments.com is doing this. What is the major benefit to me as an apartment investor for using that, as opposed to just using Apartment.com as a listing, and then they go to my website to do everything else?
Dan Rusado: Sure, so I’ll get to the investor part. But the main reason we did this and the main complaint in the industry from a renters standpoint is that in order to evaluate 5-10 places, you’ve got to pay your $50 screening fee at every place, you’ve got to get a hard credit check. The practicality of seeing several places and being interested in several places is just kind of non-existent. It’s sort of akin to several years ago, when you applied for colleges, you had to have an entirely separate application process for colleges and now there’s that common app for colleges.
So one of the big things we wanted to try to accomplish with this rental tool was to help ease the chief complaints of our renters, which were not having to pay multiple times for a screening, and just only getting a soft credit check instead of a hard credit check. So we sort of eased the burden on the renters to be able to participate in this process. So that’s from the renter standpoint.
And then from the owner, customer or investor standpoint, being included in this process, a) gets you access to more renters, it eases your administrative burden of having to deal with application, screening, leases… We built a lease that works in every jurisdiction in the entire country, so not having to have lawyers in all 50 states to figure out whether the lease is valid or not; then of course, rent collection.
So the system that we’ve built is mainly geared towards independent owners and mid-market, meaning that 20-50 unit range. And so for anybody that’s investing in properties up to that 50-unit mark and wants to be able to have them all in one listing and manage the rental and not have to deal with all the administration that goes along with that, that’s kind of what’s in it for them.
Theo Hicks: And then last question – and I know you’ve kind of already mentioned this, but obviously we’re in uncertain times, as the title of this episode has… What are some of the best practices that have changed for apartment investors in using Apartments.com post-COVID? I know you already mentioned the importance now of 3D tours and making it so that people can get an understanding of the unit and the property without actually happened to go there in person. Is there anything else that has changed, whether it be the types of photos included or the description or the analytics to look at or really anything that’s changed post-COVID?
Dan Rusado: Two or three things. One, like you said, the 3D tour is definitely here to stay, even post-COVID. There’s all kinds of now mapping where you can visually see where your unit is relative to other units, relative to the street, etc. There’s a third party that we partner with on that. And we also build some of the tools ourselves, where you can get all that contextual awareness.
And the reason why that’s important in the 3D video is important post-COVID is I think what renters are realizing is they don’t need to run around to 10 different places to be able to narrow it down to two places. I think post-COVID people will still go and see the place or two that they really like. But if we can create an industry or a set of tools where they really feel confident that they understand the context of the unit that they want relative to everything else that’s going on, then that saves them time. So I think that that’s a trend that will be here to stay, even after COVID.
Theo Hicks: Okay, Dan, is there anything else that you want to mention before we conclude the interview?
Dan Rusado: Other than just to reiterate and summarize that, really, I think what all this means is that we’re headed, instead of a model-driven world where you use generic imagery and descriptions of your property based on your 1, 2 or 3 bedroom models, we’re headed towards that unit-level world, where in order to put your best foot forward with the listing of your property is to really explain the experience that that renter will have in that specific unit.
If you think about all the different things that we’re talking about and the best practices we’re talking about, that’s where the whole thing is headed, in my opinion, and where the industry is headed. And the better you can describe that experience to the renter, the better off, the more leads you’ll get and the more viable conversions into leases, qualified renters that you’ll get. So I think that it’s a high time to be in this industry for that reason, because there’s a lot of work that still can be done.
Theo Hicks: Perfect. Thank you so much for that summary, and thank you so much for joining us today and providing us with your advice and best practices to ensure that our Best Ever listeners and apartment rental businesses continue to succeed during these uncertain times. As you said, everything we’ve talked about comes down to explaining the experience that the renter will have in that specific unit. So away from the model-driven world, generic, default, to a very specific detail, the unit level world.
We talked about the best ways to set up the listing, with what to include – number of photos, types of photos, the videos and the 3D tours. We talked about the analytics and that you can either do trial and error to test the changes and see how it affects your conversion rate, or if there’s a paid service, that gap analysis. We talked about the importance of the description, what to include, the size. We talked about the Apartment.com turnkey experience. And we also talked about the changes during COVID. Again, all of it ultimately is surrounding the unit-level experience.
So Dan, again, thank you so much for joining us today. Best Ever listeners, as always, thank you for listening, have a best ever day and we’ll talk to you tomorrow.
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