Many property management reports focus on occupancy. Every week, how many move-ins will you have? What do you have as preleases? The number of lease renewals is equally important.
Renewal is a Satisfaction Indicator
Securing a move-in is only the first step toward building a relationship with a new resident. As time goes by, one of the true indicators of property success is the number of residents that renew their leases. Residents demonstrate their satisfaction at a property when they make the decision to continue living in their apartment home. Residents, who are frustrated with poor maintenance, lack of follow up, poor communication and yes, sometimes rent increases, may never call the leasing office to ask questions or voice concerns. They simply turn in a move out notice and move away.
Renewals Reduce Turnover, Reduce Expenses
Reducing turnover has the potential to save a property thousands of dollars in expenses. In addition to the rent loss from a vacant apartment and advertising costs, consider the time for the maintenance team to complete the turnover process preparing the apartment for the new move-in. The combination of labor, supplies and lost rent can quickly total $1,000 or more for each move-out. Imagine if each month you were able to convert one move-out notice to a lease renewal. This could save $12,000 in maintenance expenses! The decision to renew or move is strongly influenced by the performance of the leasing and maintenance staff, not the potential increase in rent. Laying the groundwork for lease renewal starts on move-in day – the turning point where an applicant becomes your resident.
Resident Retention Ideas
A thorough pre-move-in inspection to guarantee a defect-free “welcome” is essential. Turn on the ice-maker; check the temperature on the water heater. Make sure day one of a resident’s occupancy is a 100% satisfied experience.
- Make sure to demonstrate the mechanical apartment systems, (air conditioning, furnace, programmable thermostat) during the move in inspection.
- Review the features benefits, during the move in inspection and create excitement and anticipation about their new HOME.
- Contact new move-ins during their first month of occupancy; ask if the resident has questions or concerns. Use a reminder program to contact residents at 3 month and 6 month intervals, positive contact will confirm you have concerns in addition to the timeliness of rental payments.
- Take the time at lease signing to review the entire lease, offer to review again in the future, because the focus is probably elsewhere on moving day.
- Leave survey and comment cards with service orders. When a comment or suggestion is received, acknowledge the response regardless of the nature of the comment. RESPOND and acknowledge. Service request call-backs can solicit resident feedback to identify customer service problems.
- Whenever some one calls to voice a concern, complain, vent or maybe even offer a suggestion, thank them for taking the time to make the call.
Taking a proactive position, communicating with your residents throughout the course of the year can create customer loyalty. The renewal process starts proactively with positive resident contacts to test the waters and get a feel for the mindset of your resident. Moving out of town, loss of income and a change in family status are some move-outs that cannot be influenced. But, if the renewal process starts on day one of a new residents lease, the number of leases that renew will increase.
Lori Hammond has been in the property management business for over 30 years, after starting as a part time leasing consultant. She has worked with some tremendous industry leaders such as Oxford Management, NHP Management, AIMCO, Alliance Residential, Boston Capital, The Sterling Group, P.K. Housing and currently Management Resources Development. For more information, visit her web site at propertymanagementminutes.com.
Reprinted with permission of Multifamily Insiders. Multifamily Insiders was created to provide the first true online networking group for the multifamily industry and its partners. For more information, visit www.multifamilyinsiders.com.