How do you View Tenant Turnover?
“Keeping the backdoor closed” is one of the many focuses leasing teams have at properties across the United States. Tenant turnover costs each property management company time and money. Something we like to avoid wasting.
It’s estimated that the cost of a single move out starts in the $1000 range and can easily grow up to $5000 depending on the type of replacements that are needed…. this averages to $2,500 per unit. – innage.com
What are your Tenant Turnover Goals?
If you are like most property management companies you strive for a tenant turnover below 60%. If you are like the top players in the market you manage to hover around 35-50%. Why do we do this? What are the negatives of tenant turnover and how can a reduction help you sign more leases and increase occupancy overall?
Cost of Tenant Turnover
Above we talked about hard dollars associated with low retention. What is the cost to your property? Is this something you know? It is important to make your own calculations around the costs of tenant turnover so you can understand how important of a data point this is. Some common factors to consider when calculating tenant turnover are:
- Cost of lead generation to fill vacancies
- Cost of marketing to turn those leads into residents
- Lost rent in units that may stay vacant for weeks at a time
- Cost of turnover when preparing a unit for the next resident
How COVID-19 Impacts Costs
We all agree tenant turnover is costly to the business. However, this has taken on a whole new meaning in the COVID-19 era which has lead to record high vacancies in the industry.
In an effort to fill these vacancies, we are seeing a decrease of rent costs and an increase of concessions offered. What does this mean for tenant turnover? Well think about that 2 bedroom unit a resident is paying $1,850 for. If that unit become vacant, it isn’t going on the market for $1,925, it is going on the market for $1,800 with 4 weeks free. That means lost rent is now added to the list of costs incurred due to tenant turnover.
Why Residents Who Stay Matter
Residents who renew their lease with you year after year are your evangelists. These are the folks who are so happy with where they live, they pay their 3% rent increase, and continue to sign 11, 12, and 13 month leases again and again.
These residents bring their friends and families into their homes and rave about how great the unit, property, and staff are. They throw parties by the pool and show others what a lifestyle at your property could look like. When a friend says “I’m looking for a new apartment” they yell “OMG come here, you will LOVE it!”.
These residents who stay are not only saving you money, but are bringing you new business whether you know it or not.
Lastly, imagine telling that prospect you just toured that 60% of your residents renew when their lease is up! This is a selling point that’s effectiveness cannot be overstated.
How Nurture Boss Reduces Tenant Turnover
At Nurture Boss we don’t only help you turn prospects into paying residents. We also help you “keep the back door closed”.
Nurture Boss has a variety of templates that are targeted specifically to current residents in order to keep them happy and help renew leases. Some examples of these are:
- Move In Checklists
- Maintenance Request Follow Ups
- Lease Renewals
By using the same high engagement communication methods we provide for your marketing efforts with current residents, our customers see a reduction in tenant turnover saving them time, money, and providing a new sales tool with evangelist residents!
