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the rental neighborhood.

Discussion in 'Christmas Trees & Seasonal' started by David Gretzmier, Dec 7, 2010.

  1. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Messages: 3,646

    You guys know I am pretty much a non rental guy because I buy into the belief if you can close folks on a higher first year price on a purchase deal, then they take ownership in their lights and think of them as theirs, and then they are more loyal to me as far as the company that puts them up. but what happens on purchase deals the price is so high you are pretty much driven straight to the top 1% homes and you leave a pretty large market behind you that would pay someone to put up thier lights but not at my price range.

    I also had thoughts running around in my head this year after the threads about doing neighborhood houses at certain set prices, and then an opportunity presented itself and I took it.

    The POA board secretary for a subdivision next to one we do a dozen or so houses in called me a week before Thanksgiving or so to look at her house and the front of her subdivision for lights, and over a day or two she and I worked out a deal for her neighborhood. on each "deal" the front face edges, clear c-9s only, a few twinkle bulbs, with an automatic timer, rented up, down, stored, for 450 bucks. my goal for them and me was to do 10 houses in the neighborhood, and we rehang jobs next year in October. we ended up getting 8 jobs in the neighborhood including the front of the entrance gates that ended up being 1000 rental on garland and bows, and 4 were just straight 450 jobs and 3 were like the front that added bought items on and bumped the rate up for next year . The homes are mostly narrow and deep, which helps the linear feet on the deal. all homes were less than 150 feet except one, and most were around 120. the 4 straight $450 c-9 jobs were all done in one day by one crew, and next year with all bulbs and clips in place my goal is to do that plus one or two of the jobs with the deal but add ons as well. on the rehang dollars, volume is the key.

    for now, I am going to keep this neighborhood as my only rental area and start marketing it next year around july with the POA paper and electronic newsletter and also by sponsoring a neighborhood light decorating contest with the prize being rented garland around thier door and a 4 foot rental wreath installed and taken down by us. maybe they will fall in love with the item and buy it next year, who knows? But I believe next year we can get close to 15 houses. There are 197 in the subdivision, and the average home sells for 230-280k. so not quite my typical customer, but not starter houses either. probably the most I will get is in the 25-35 range, but we will see. I will keep you guys updated on this thread, and also see if that loyalty thing is truly bad with rental deals as I have heard.
  2. britelights

    britelights LawnSite Member
    Messages: 91

    What an awesome idea Dave! Glad to hear it went well. We have plenty of neighborhoods in the 200k - 300k range...we call them "house poor" neighborhoods and we don't even market there. But your idea is a great way to capture some of that market. I would love to try that in our area, but, like Joe in NY, our problem continues to be labor. We have to figure out a way to get good, reliable crew foremen.
  3. hotrod1965

    hotrod1965 LawnSite Senior Member
    Messages: 587

    See, I think that people who rent are more likely to stay your customer than those who purchase.
    We get several people a year who call us to re-hang lights they purchased from another company because "its too expensive". We never close those deals, because we aren't any cheaper...
    But I'm sure these folks move on to find some Joe to hang their lights on the cheap.

    But I am curious on how your project pans out. We have talked about doing this in the past and have never stepped up to do it.....
  4. OP
    David Gretzmier

    David Gretzmier LawnSite Gold Member
    Messages: 3,646

    I have high hopes, but we will see. It is really hard for me to think about renting. I did a couple of bids in that neighborhood before the deal got set in stone, and both of the folks got their house done for about 400-500 less than I bid it for first year under purchase. but neither had signed up until the deal was spreading around the neighborhood, so they may have spent nothing with me at my regular purchase rates.

    again, the idea here is volume and speed. I have 2 houses in the neighborhood that are across the street from each other, and 2 folks next door to those have indicated they are on board for next year. that is what you really want, the truck in one place and having guys just walk from house to house as if it were one job. That also makes the bulb maintenance far easier.

    for this to work, I think the price range on homes has to be right. new, narrow tall and deep homes 200-300k is about perfect. with a 2k-3k house payment, those folks probably have 100k-200k in income, so $450 is pretty impulse doable. but this probably would not work in 135k to 200k neighborhoods. and 300k to 400k houses around here are too big linear foot wise and speed wise for this deal to work. some of those folks buy from me now.

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