FOR BROKERS: Companies to Watch
BY ROBERT FREEDMAN
Right at home
Apartment locator quickens growth by slowing turnover.
If your experience with rental locator services dates back to when you were hunting for your first digs away from mom and dad, you probably remember being offered instant coffee out of Styrofoam cups and filling out your search form while sitting in a wobbly secondhand chair. If that’s the case, you won’t be prepared for Chicago Apartment Finders (www.chicagoapartmentfinders.com.)
The coffee comes premium, not instant, with fresh-baked cookies. And forget about the wobbly chair. Prospective renters sack out on overstuffed sofas if a leasing associate isn’t available, or they play computer games, check their e-mail, or shoot baskets. The waiting room is designed like an apartment so that renters feel right at home.
“When customers come through our doors, we want them to see immediately that they’re in a successful company,” says Justin Elliott, 30, who founded the company with his college buddy, Andrew Ahitow.
Since its launch in late 2002, the rental locator company has grown to be one of Chicago’s largest with 40 leasing associates working out of two offices, the company says. Elliott projected his leasing associates would generate $4.4 million in gross commission income on 4,400 rental transactions in 2005. He predicts the company will be the city’s largest locator service by the end of 2006.
The company’s rise is built on two foundations: reducing turnover among leasing associates and building a relationship with renters that extends beyond the leasing period.
To keep leasing associates on board beyond the four- to six-month period that’s common in the industry, Chicago Apartment Finders offers them a 30 percent leasing commission split to start, up from a typical starting rate of 25 percent, and ratchets that up to 45 percent as associates meet performance milestones each month. Commissions, paid by landlords, are usually equivalent to the first month’s rent.
The retention strategy shows signs of working. Of eight original leasing associates, six are still with Chicago Apartment Finders, and the average tenure is almost two years. The company’s top associate is 25 and earned $115,000 in commissions in 2004; he was on track to reach $130,000 in 2005. Almost a dozen other associates earned more than $70,000 in 2004, and Elliott expected half of those to earn more than $80,000 in 2005.
To help associates get off to a good start, the company offers a six-day mandatory orientation. It includes selling and communication skills training and tours of rentals to give rookies an understanding of the market.
To add value for customers, the company offers timely information on such tasks as how to find a nearby bank, get the cable turned on, rent furniture, and obtain a gym membership. “For our typical customers—18 to 30 years old—renting marks a big point of churn in their life,” says Elliot. “Often this is the first time they need to think of these things.”
By offering “service after the sale,” the partners of Chicago Apartment Finders are setting the stage for customers to find their way back the next time they decide to move.
