Resident retention has always been a metric measured by property management companies and their teams. However, at Nurture Boss, we are noticing this topic becoming more and more prevalent. As occupancy reaches all time highs across the country, our attention is inevitably moving to resident retention. Now that we have more tenants than ever before, how do we keep them?
This, of course, is going to depend on a wide variety of factors. Market, demographic, and building type are only a few of those. Tenants will renew or vacate for different reasons in different communities. However, we can confidently say there are a few common reasons why residents renew and why residents put in their notice. At Nurture Boss, we have collated our research in this blog post in hopes of providing insight and strategies for communities looking to increase their renewal rates.
Why Resident Retention Is Important.
We will spare the deep dive here as this is a fact most of us know already. It is worth briefly pointing out the obvious that renewing an existing resident is magnitudes less financially burdensome than filling a vacant home.
By renewing existing residents you avoid the costs associated with turning a unit, the marketing and advertising costs, the onsite teams time (payroll costs plus burn out and possible turnover), and the costs associated to vacancy loss in the form of rent paid (or not paid in this case). That’s a lot of costs you can avoid!
You can also check out this other post where we talk about “The Cost of Tenant Turnover”
Why Residents Are Putting In Notice And What To Do About It.
The Problem: One of the most common reasons a resident does not renew their lease is because the size of the apartment no longer fits their need. This is usually because they need a bigger home but certainly the need for a smaller floor plan can exist as well. As a property manager we recognize this as an irrelevant concern. “We offer many floor plans!” you’re thinking. Well don’t assume the renter is thinking the same thing. When your resident realizes the apartment size no longer works for them, don’t be surprised when the first thing they do is start looking at different communities.
With the global adoption of “work from home” apartment size is becoming one of the top reasons residents are not renewing their lease. Many people are now looking for an apartment with that built in office desk or second bedroom to work out of. Being conscious of this and incorporating it in your marketing is key!
The Solution: The best defense against this reason to vacant is education. Are you getting ahead of the renewal phase of the resident and ensuring they have all the information they need? When is the last time you sent them floor plan options you have available? It is normal for an onsite team to only send information about renewing their existing apartment, but are you also letting them know you have other options? Staying in tune with what residents needs are and making sure they know all the choices they have is an easy way to get ahead of any potential notice they may put in when renewal time comes around.
Ignored Maintenance Needs And Repairs
The Problem: When a resident feels like their apartment is not getting the repair and upkeep attention it needs, they are likely to start looking for a new place to live. “Our maintenance team is great!” you are probably thinking. I bet they are! But what about the repairs they don’t know about? Relying on a resident to tell you when something needs fixing is a sure way to fall behind on repairs and create a vacancy when lease renewal time comes.
The other form of repairs we have to consider are common area repairs as well. When that resident goes to the gym every single day and has to stare at that dead lightbulb it starts to create an internal story for them. “2 months and the light is still out”. “6 months and the light is still out”. This creates a negative narrative that you have the power to control.
The Solution: Proactively ask residents if they have any maintenance needs. This is potentially one of the easiest “solutions” you will see in this post. Sending regular check ups to your residents and proactively asking if they have any needs is an easy and effective way to stay on top of things. Ensuring you have an easy to use resident portal or mobile app to submit maintenance requests is also crucial to success here.
Those common area repairs are the responsibility of the onsite team. We can’t wait for our residents to alert us of maintenance issues on the property. Regular property walks are a great way to stay ahead here.
Rent Too High
The Problem: Rent being too high is another common reason for tenants putting in their notice. This reason is a little more tricky than the others. There are definitely scenarios in which a tenant who can no longer afford their rent should leave. However, let’s consider a few scenarios where this is a bad reason.
- The current floor plan they are in is difficult to lease
- The community is struggling with low occupancy
- They are currently paying higher than market rent
- You are currently offering large concessions that the newly vacant unit would have to honor
The Solution: The solution here will be directly correlated to the current situation of the property. In general you will of course work with the resident within the bounds you can. Sometimes moving to another floor plan is also an option. The nuance of how you handle the scenario is only understood by you. However, knowing this is a concern or issue for the resident is step #1. A high level of communication leading up to their lease renewal is the best way to get ahead of an issue like this. Ensuring you are reaching out to resident approaching renewals and having conversations about their specific situation is the best way to stay ahead here and increase resident retention!
The Problem: We’ve all had neighbors we didn’t like. The thing about living in an apartment is that those neighbors you don’t like are really close. In an apartment community bad neighbors almost always means loud neighbors. A bad neighbor could also come from any direction. Left, right, up, or down. When it comes time to renew a lease and the resident chooses not to, there is a good chance this is the reason why. We also know that living in an apartment you have to be able to tolerate a reasonable amount of noise. It can be a fine line to walk.
The Solution: Just as we are familiar with this complaint we are also familiar with the solution. At the end of the day it comes down to educating the resident on their options. If no progress is made after working with both the parties, there is always the option to move. Let’s just make sure that isn’t a move out of your community! Letting residents know of transfer options during lease renewal is a great way to get ahead of this. What we don’t want is the news of a loud neighbor to be a surprise during renewal time. Sending frequent communications and check-ins to resident throughout their lease is required to get ahead of any would be issues.
Communication Is The Answer To Resident Retention
You may have noticed a pattern in our “Solutions” section for each notice to vacant reason above. More often than not, consistent and personal communication is all that is needed to keep a resident happy and renewing their lease year after year.
How though, do you communicate consistently and personally with hundreds of residents? At Nurture Boss we have set out to solve this problem. Our platform allows onsite teams to automatically communicate with residents in a highly personal way. Allowing onsite teams to get ahead of any would be problems, ensure each resident has a delightful experience, and drastically increase renewal rates.
Here are some recommended touch points throughout the resident life cycle that Nurture Boss has found to be effective in increasing resident retention:
- Move in checklists
- 30-60-90 check-ins post move in.
- Maintenance follow up (with a survey)
- Event invitations
- Rent reminders
- Lease renewal notifications