By Debi Wherry (MultiFamiilyExecutive.com Article) — Resident turnover is a serious reality for the multifamily industry. According to the National Apartment Association 2018 Survey of Operating Income & Expenses, turnover rate across apartment rentals averaged 46.8% last year. The average cost of a single move out? $1,800 conservatively. For a 200-unit community, that totals more than $168,000 in annual turnover expenses.
While a market’s renter mobility, median age, and economic strength contribute to apartment renter turnover, what happens between the lease signing and delivery of renewal notices plays a key role in both the macro financial picture and a resident’s decision to call your community “home.”
But what if we could reduce turnover by one move-out a month? A 200-unit community would reduce its annual expenses by more than $21,000 per year. Over the course of five years, you’ve saved more than $100,000.
One could argue that resident turnover goes beyond the bottom line. As property managers, we’re meeting one of the most ultimate human needs with housing. But as an industry, we run the risk of losing meaningful resident connections with heavy reliance on email, social media, and online resident forums. The question begs, doesn’t a deeply human experience deserve a high-touch personal approach?
While most residents expect the convenience of online services and communication, it’s a tedious balance. Too little tech and a community seems out of touch; too much, and you’ll lose the personalized approach that keeps residents loyal and engaged.
Harnessing technology with online renewals enhances a resident’s experience with convenience. Coupled with face-to-face interactions and personal touchpoints, the renewal process becomes a natural set of resident retention opportunities.
Perhaps it’s time to rethink turnover and circle back to basics with six surefire resident retention strategies:
1. Personalize the Approach
Once the lease is secured, build out multiple touch points with the resident, including a call within one week after move-in to ensure the process was smooth. After the first phone call, we move resident communication to online channels with email, resident portals, and community social media pages for events and happenings. Keep residents in the know and allow them to opt in on how they prefer to receive and give information—text notifications may work for many while others prefer email, newsletters, or even phone calls.
2. Maintenance and Communication Matter
The No. 1 chief concern or complaint from residents? Maintenance. Especially as the weather turns, maintenance can quickly move from preventative to full-blown corrective when, for example, the AC or heat goes out in a unit or whole community. While fixing the issues is half the battle, responding to requests and communicating early and often is key to keeping frustrations from spilling over.
At Fogelman, we use maintenance requests as an opportunity to showcase quick response time by acknowledging issues within 24 hours. Should a fix require extensive repair, we keep residents looped in on all next steps and expected completion dates. Following a maintenance request, many property managers bookend the resident touch point with a call to check in and ask, “What else can we do to make your living experience better?”
3. Stay Flexible
The uptick in home purchases, coupled with the building boom in most major metro markets, makes it tough to compete with newer product coming online and deep developer concessions. While not every community can offer steep discounts or go toe to toe with a brand-new community, it is possible to stay flexible in lease terms for current residents. At Fogelman, a majority of our properties are revenue managed, which allows us to offer optional lease terms from one to 13 months, flexibility with move-in and move-out dates, and the ability to fit into any scenario of housing needs. Again, using a flexible renewal process as another touch point in a proactive resident retention program could save thousands of dollars each year.
4. Start Early, Stay Late
With revenue management in play, we recommend starting the renewal process anywhere from 90 to 75 days in advance of expiration. Once pricing options are set, we send a notification and often invite residents to visit the leasing office to discuss terms and chat through potential options in person. During this time, we extend office hours once a week to meet one-on-one with residents, ask for feedback and get to know our communities on a deeper level. It is also our time to add another touch point for asking about their living experience and inquire if there are any maintenance needs that the resident hasn’t had time to call in or request.
5. Service Wins with Surprise and Delight
When budget is available, turn to services that “surprise and delight” residents. A move-in welcome kit, towel service at pools or in fitness studios, coolers with bottled water, visits to the pool with cold treats for guests, and even complimentary dog walking are bonuses that add a level of surprise and satisfaction to the resident experience. Larger properties can also enlist the help of designated resident ambassadors, who assist with both outreach marketing to local corporate employers and on-site efforts such as delivering birthday cards, promoting events, or communicating resident needs.
6. Good or Bad, Stay Hungry for Feedback
If knowledge is power, then reviews are the golden ticket to resident retention. In this transparent digital world, reviews are the No. 1 focus in understanding where a community hits the mark and where it falls short. The key isn’t always the number of stars but the acknowledgement and response to all reviews—good or bad. Even if the issue is a tough one, we find a swift response full of genuine concern and compassion, coupled with “a good listening ear,” can diffuse any frustration and allow for a collaborative solution. At Fogelman, we have a dedicated reputation manager who works alongside each property manager to ensure all reviews are answered within 24 hours. We take reviews a step further in asking our residents for comments with online surveys and in-person feedback. With the help of surveys and data-driven insights, property managers can make informed enhancement decisions based on what residents are requesting.
Even with the best management practices, no apartment community will enjoy a zero-turnover rate but a sustained focus on resident retention is well worth the time and money.