Homestead America
Market Rent: $894 – $1,020 (without incentives)
Our earnings: $2,305.71 per unit on average for the past 7 months!
Background
The Harlow on Main is a multifamily building located at 195 E Main St, Columbus, OH 43215 (Discovery District in Downtown Columbus). The building completed construction in 2020, right when the COVID pandemic started. We made the promise to the owners of the building that we would move in before the pandemic and decided to keep our commitment even if it meant risking losing money. The Harlow is owned and operated by Homestead America, a multifamily and student rental company in 9 states and with over 5,000 units and 10,000 student beds owned.
The Process
Upon signing, we immediately sourced and funded the furnishings needed for the 6 units and began moving into the building. The units were new constructions so it was extremely easy to get the units uploaded as fast as possible. We also purchased electronic code door handles and security cameras to make the overall operation run as smoothly as possible. Within 2 weeks, we had every unit fully furnished with custom locally made artwork, top of the line furnishings and luxury branding elements that met our GH Brand. We also took top of the line photographs of each unit, the building and allowed the Harlow to use the photos for their marketing to help them get more tenants into the building at no charge.
Due to the pandemic we had to get creative with the target demographic to bring into the building. Business travelers were nonexistent in the market these units were in as many companies were laying off workers and cutting down on all unnecessary expenses. We ended up, targeting local consumers and traveling nurses. Traveling nurses were exceptional tenants and still had the employment and needed funds to cover the rent we wanted to hit. Furthermore, their stays were relatively longer than usual which in this case helped due to the dramatically low demand for short term rentals at the time when covid first started. One of the main ways we did to pivot and target this demographic were websites, forums and social media groups made up of traveling nurses. Mainly these were facebook groups composed of traveling nurses where they shared useful value to each other. Another aspect that our team in the Philippines helped with was following up with our past traveling nurse guests to see if they had any friends that they knew were going to be traveling to Columbus soon. This obviously wasn’t a huge lead generator but we were able to secure a few longer term stays that helped with keeping our numbers up during the hard times.
Overall, due to this decision, we were able to profit when many of our competitors like Stay Alfred, Open Door and Front Desk decided to close their doors and refuse to pay for the space. To put things into perspective, the best hotel in the city of Columbus was at an 8% occupancy rate, refusing to pay investors and laying off much of their staff as we were sitting at over 74% occupancy leaving doors open.
The Results
While we still would like to have done better, we still consider the past 7 months as a success at The Harlow. On average our units brought in 2.4 times more revenue than their asking price for their units. Furthermore, for several months we were the only people occupying the building and bringing in revenue. They are a very similar company and have a lot more funding but their quality of work and level of expertise in the industry still has room to grow. During the first month, the competitor decided it was a good idea to put up 40 units in one location during Covid. This resulted in an oversaturation of the market and made it almost impossible for them to break even. The increase in supply caused them to have to lower their prices which led to lower quality tenants and an increase in issues for the rest of the building.
Despite all of this and it being the worst time in the travel industry, we have brought in a total of $96,840 with just 6 units in 7 months. The Harlow is now moving forward on getting better tenants in the door and we are setting our sights on helping them expand to even more markets and making the units they have now even more profitable.
