Professionals, who have been in the multi-housing industry for any length of time, know that working in the apartment industry can be like riding a roller coaster. As the economy rises, residents often purchase single family homes or move to more luxurious apartments. But as the economy falls, there are greater numbers of people seeking affordable housing and occupancy and rental rates often rise.
This economic ebb and flow can be stressful and frustrating for property management professionals. Being at the mercy of the economy makes strategic planning, staffing and capital improvement decisions difficult… if not impossible.
So, what can you do to stabilize the variables that affect your property in order to limit turnovers and maximize rental rates? The short answer is to make living in your property so extraordinary that people will do just about anything to stay while they accept reasonable rent increases without complaint.
Are you thinking, “In what world do you live?”
It does sound impossible. But throughout the country, people across a broad income spectrum buy products and services that cost more than they want to pay. They do this because most people will pay more for something if they believe it’s worth it.
Ask yourself if your residents believe living in your property is worth paying top dollar? If the answer is “no” you will either have to deal with the revolving door of high turnover – which costs a bundle – or you will consistently be compromising on your rental rates.
So how do you provide a living experience that will encourage people to stay and pay? Understand that the primary reason people choose to stay in their multi-housing property is because they feel physically and psychologically safe. For them to remain in your property, you need to provide both.
Physical and Psychological Safety
Physical and psychological safety are achieved through extraordinary service.
Physical safety has to do with the aspects of your property that affect your residents’ ability to feel safe from bodily harm or physical risk. This is achieved through extraordinary service when a highly-skilled maintenance staff sees problems before they occur; when they seek out the best and safest way to make a repair; when they always have the resident’s best interests in mind and instead of looking at maintenance requests as complaints, look at them as a chance to show residents how much they care.
Psychological safety means, “I belong here. These are my people, this is my home and this is where I want to stay”.
When managers and staff spend time outside of their office and are on the grounds greeting people and making “small talk”; when they treat everyone in a friendly and genuine manner; when they treat residents with respect, kindness, regard and compassion; and when they use “pedestal” language to let residents know they are important and valued.
Why Do Tenants Move?
No one wants to move! It’s a hassle and expense. So why do they? Most people move because there was no compelling reason for them to stay. They may tell you they are leaving because they want to be closer to work or they need something cheaper, but what they won’t tell you is that they didn’t feel like they were valued or that it never felt like home.
Since it costs five times more to bring in a new resident than keep a current one, it would make sense to do everything in your power to provide service so extraordinary that moving out is not an option. It’s up to you to help them feel like they are already home.
Petra Marquart is a principal at Petra Marquart and Associates. She is an internationally recognized keynote speaker. Petra is the author of the best seller, The Power of Service: Keeping Customers for Life.
Reprinted with permission of the Rental Housing Association UPDATE.