May 6th, 2009
Mark Kramer, owner of Kramer Properties, enjoys a strong foothold in the South Bend area student housing market, renting to over seven hundred and fifty student tenants. In contrast to the typical dilapidation associated with term “student housing,” the houses Kramer rents are clean and well-kept. Security guards patrol the neighborhoods of his houses at high-risk hours, and each home is equipped with a security system.
What an outsider might not guess is that Kramer stumbled across his job as a landlord “purely by mistake – or serendipity.” In 1990, having spent about twenty years in the pest-control business, he planned to purchase a piece of property on East LaSalle Street. He had intended to tear the house down and convert the land into a parking facility for business trucks. However, when he approached the owner, he learned that some St. Mary’s students had a lease for the following year. Kramer bought the property anyway, intending to honor their lease and then follow through with his original plan.
By September or October, though, he had received inquires from Notre Dame students about renting the house for another year. “I just kept going,” Kramer said. “I had to turn students away because I only owned the one house. At first, I still planned on turning the property into parking, but after a while I started asking the students questions about what they wanted.”
In 2004, he sold his pest-control business and began purchasing property aggressively. Kramer noted that there are two main parts of his job: “The first is ‘rehabbing’ older homes and making them a vibrant part of the community. The second part would be the people. I’ve met so many people in this business, and I really do enjoy meeting the students and parents and interacting with them. Everyday, there’s a surprise, and it’s usually a good one. The rewards of my job are much greater than the drawbacks.”
When questioned about the negative aspects of being a landlord for students, Kramer admitted that he certainly faces difficulties. “This is the first time the students have lived alone, and they’re not familiar with the inner workings of homes. It may sound petty, for example, but many of them don’t know what should be put down a garbage disposal. So maintenance can be an issue, because the students don’t know how to use a house.”
He was slower to mention what many assume would be the main challenge in the student housing business: partying. “Naturally, there are some students who have had a few too many parties by the time the year is over. Our goal is not to take their deposits, but sometimes we find that we need to – and we are constantly showing them how to get their deposit back.” He added, “We educate the students too: they need to learn how to be neighborly and live in a home. And by in large, they respect the houses.”
Kramer emphasized that the student safety is a greater concern than property damage. “Student safety is an issue that I do not take lightly,” he asserted. “I feel the same responsibility towards each one of my tenants as if they were my son or daughter.”
In addition to hiring his own security guards, Kramer pointed out that each of his homes is furnished with an ADT security system and good lighting. “It’s an ongoing challenge,” he concluded, “and the very worst thing that could happen is if one of my tenants should be physically harmed.”
Less flexible people might have found the transition from the pest control business to the property businesses rather abrupt, but Kramer finds the two businesses similar in one essential respect: customer service. “Both are about serving clientele and built on the same model of superior service,” he remarked. “If you offer excellent service, people will come back and refer others to you. My time in the pest-control business was useful for the advertising experience, but even there, year after year, around thirty-five percent of my business came from referrals.”
Now, Kramer estimates that fifty percent of his business comes from word-of-mouth referrals from students. He cited an example of a family of six brothers, four of whom have lived or are currently living in one of his houses. “The fifth brother will be in another home next year, and they tell me the sixth will very likely come to Notre Dame and live in one my houses too.”
Kramer highlighted the pleasure he derives from these interactions with the students: “I show the majority of properties myself, and when one student comes, I see brothers, sisters, cousins, and friends.”
Kramer quipped, “Conceivably, one day, I’ll see a son or daughter of a tenant living in one of my houses – but I hope my daughter will be running the business by then.” Kramer Properties can be called a family-orientated business in more ways than one: his daughter is one of Kramer’s six employees and works as the company’s leasing agent.
Kramer attributes his success to the quality of the service that he provides. He said, “The first house that I rented was popular, but in less than desirable condition when I bought it. The students were happy because that was the norm.” During the first summer he owned the original rental, he made substantial improvements to the property, including carpeting the bedrooms and replacing the roof, windows, siding, and floor.
“When the girls who had rented it came back in the fall, they came to me and asked, ‘What happened to our house?’” he recounted. “They were juniors, and right away they signed a lease for the following year. And when they moved out, they had it rented out for the next two years.”
Kramer felt there was an essential difference between him and the typical landlord. Kramer explained that many landlords have the attitude that “they’re students; they’ll tear it up anyway.”
Contrary to this, Kramer thinks that “if you give a young person an old, beat-up car, they’ll treat it like one. And in the same way, if you give them a shiny new car, they’ll want to keep it in that condition. My attitude is to always look at our houses with the question ‘Would I allow my daughter to live in this house?’ in mind. If the answer is no, then the house isn’t fit for the students.”
Kramer stated that he does “as much as he can to make the experience enjoyable for the students.” Students’ experiences extend to everyday details of living, not just the moment they move in. Kramer commented, “I don’t make the students wait a long time for a plumbing difficulty or something of the kind. I expect them to do their part, and they have a right to expect that I will do mine.”
His philosophy goes a long way toward explaining why Kramer Properties has always enjoyed a one hundred percent occupancy rate. Ninety percent occupancy is the rental industry norm. “I hope to be doing this for a long, long time to come,” he concluded sincerely.
