For property managers, securing long-term tenants through lease renewals is essential in building a successful, stable business by avoiding low vacancy rates and high turnover. Unfortunately, a recent renewal intention report from Kingsley Associates and MFE has brought property managers some disappointing news: for the first quarter of 2016, only 51.4% of residents responded that they “probably would” or “definitely would” renew their lease in the first quarter of 2016.
Compared to the 54.9% of respondents who stated they would most likely renew at the end of 2013, it is apparent that the average number of leaseholders who plan to stay in the same apartment is steadily dwindling. This is due, in large part, to the apartment industry boom originating in post-recession 2010. According to Axiometrics, a real estate research firm in Dallas, Texas, more than 300,000 new multifamily units will be put on the market this year. With all of these new available properties, it has become increasingly easy for discontented tenants to relocate to a new apartment, therefore collectively lowering apartment retention rates. Considering these new statistics, it is important for real estate development companies and property managers to promote strong resident relations and satisfaction with their apartments in order to encourage renewals. There is a specific approach that we, at Gainesville-based Trimark Properties, have found landlords and property managers should take in order to foster continued resident contact and increase retention.
Create a Great First Impression
Securing a resident renewal begins the moment an occupant first discovers your property. Since most renters in 2016 are millennials, many, if not most, residents will learn about your property through online marketing, such as your company’s website and social media accounts. It is important for the apartment search and leasing process to be as straightforward and interactive as possible for residents, with high-quality technology and pictures of your apartments online to entice them and create a good association with your property.
For example, at Trimark Properties’ website for Ivy House Luxury Residence Hall, an off-campus dormitory for University of Florida students, apartment seekers can take a virtual tour of all bedroom sizes on both the website and mobile app. The accessibility of an interactive website allows potential residents to take a digital tour of the property while giving property managers the power to ensure apartment seekers have a positive response to your property.
Ensure a Smooth Move-In Day
One of the only times you will actually have face-to-face contact with your residents is on move-in day, so it is imperative that it goes as smoothly as possible. Move-in day is so important, in fact, that there is an 84% greater probability of residents renewing if the move-in process goes well, according to Kingsley Associates. In order to assure that move-in day goes as effortlessly as possible, the most important element is to have an efficient turnover process. Be sure that inspections and maintenance are scheduled as soon as possible after the previous tenant moves out, and double check all units the day before move-in to guarantee that there are no maintenance issues. Additionally, make sure that all residents have all parts of their lease completed before move-in day so you can focus on any resident issues instead of attempting to complete leases on the busiest day of the leasing year.
Pinpoint and Address Issues ASAP
One essential way to ensure residents feel like their voice is heard is by responding to their concerns and problems as soon as you become aware of them. If there is a maintenance problem, certify that it is fixed by the next day, latest. Calling residents the day after to make sure it has been successfully fixed shows residents you are not neglecting their apartment issues and that they are a valued member of the complex’s community.
Issuing frequent general surveys to tenants is another great way to gauge resident satisfaction and find areas where your property needs improvement. If this is done in conjunction with regularly checking your social media reviews, common resident problems can be identified and fixed quickly, and tenants will be impressed with your speedy help and commitment to property improvement.
Offering incentives is a good way to encourage residents to renew their lease. It is important to note that you should begin advertising special apartment renewal rates, or “early bird” specials, up to four months in advance of move-out. You could give them a discount on the first month’s rent for the next leasing year, or if you are planning on increasing rent prices, you could give them a special renewal rate specifically for renewing tenants. Although this may seem like a loss of money for you, you will actually save on both marketing fees and turnover costs.
Promote Resident Engagement and a Sense of Community
The atmosphere of your complex should be one that residents feel comfortable coming home to. Your property should be advantageous over your competitors, whether it be due to community events such as potlucks, special amenities such as swimming pools, or gathering places for residents to come together and relax. A simple yet often overlooked tip is also to be as friendly and welcoming as possible as a leasing agent or property manager. A friendly office staff will receive more positive social media reviews and also increase retention rates. The more comfortable and appreciated residents feel, the more likely they are to renew.
Executing these tips will help you gain and keep long-term leaseholders and subsequently create a more stable business by avoiding loss of income produced by constant resident turnover.
A cross-functional writing team produces the content for this article. Writers include Aubrey Morey, Genevieve Howard, and Claire Washburn with support from Trimark’s development and maintenance team. Reprinted with permission of Multifamily Insiders – www.multifamilyinsiders.com.