A healthy leasing cycle and lead-to-lease conversion is the heartbeat of any property management business.
Done right, good leasing fills a vacant unit with a quality resident quickly, and on a steady beat. When it’s less than ideal though, it can be a repetitive drain on your business.
But how do you know if you’re knocking it out of the park with your leasing cycle…or not?
We’re already seeing signals that this leasing season is going to be different than in years past, which makes it even more important to take a microscope to your own processes, to make sure you’re creating the best renter experience possible—while paying extra attention to the time and money invested.
In this post, we’ll go through the 8 ways to maximize your lead-to-lease conversion by digging into how to protect both of those valuable commodities.
We’ll cover your lead-to-lease conversion—where and how to measure it—along with some helpful tips to get you thinking like a technician throughout your process. So let’s get to it with how to look at the whole picture first…
#1: Define Your Lead-to-lease Conversion Flow and Channel Measurement
What do we mean when we talk about a lead-to-lease conversion? Think of it like a funnel.
To boil it down, we are considering the ratios that measure your efficiency down the pipeline: starting with the leads you get, continuing to showings, and closing with an electronic lease. No matter what, you want to be measuring your conversion rates and understanding the channels that deliver the best leads. So let’s talk about the most efficient way to get the word out to renters about a vacancy.
#2: Consider All Your Listing Options (Especially the Free Ones)
While there are paid listing sites readily available, if you can fill a vacancy and get good leads through free channels then why wouldn’t you?
According to research from Tenant Turner, the majority of leads actually originate from free listing sites. Zillow is starting to charge in some markets, but there are plenty of other options still available through sites like Zumper or Facebook Marketplace.
A metric you’ll want to look at to measure profitability is your cost per lead. Simply take the dollar amount of your ad spend (which could include any listing fees) and divide it by the amount of leads you actually got. And you can further segment this number by lead source to evaluate its performance.
Pro tip: You can save tons of time by syndicating your free and paid listings through property management software with the click of a button.
#3: Respond to Every Listing Inquiry Within Minutes
Yes, minutes. When renters are motivated, you know they’ll be looking at other properties. In fact, you are 40% more likely to actually connect with them if you contact a lead within 1-2 minutes vs. even 24 hours later. Now, it’s not always feasible to hop right on a call, but there are tools available that can help you automatically respond, screen, and schedule all of your motivated renters.
#4: Choose the Right Renters
Now this goes without saying. You want someone in your rentals for the long haul. The best way to run a thorough background check is through a screening partner like TransUnion. But regardless of the speed and efficiency of your screening, you want to look at the quality of the renters downstream to get a true read. You can do this by honing in on your turnover ratio, how often your units churn, and average arrears—or the average debt that’s owed to you over a given period (usually weekly or monthly).
#5: Present Alternative Listings to Motivated Renters
Once you’ve got an interested renter in hand, make sure that you suggest other rentals that you manage if their first choice doesn’t work out. Be sure to highlight the listings on your website by automating your followup emails as well. From the State of the Property Management Industry Report, we found that the percentage of renters that wanted to apply for rentals online increased 15% from 2018 to 2019. Make sure that your rental application process is smooth so you don’t miss out.
#6: Automate and Virtualize Your Showings
Social distancing or just starved for time, technology can help you adapt your showings process to what works for you. Not only can you automate scheduling and set up self-showings for appropriated single-family rentals, paired with a cleaning regimen—you can make the showings process completely virtual with 3D-camera technology like Matterport
#7: Don’t Lose the Human Touch
Thanks to technology, social distancing doesn’t have to mean a lack of human connection. Just because you may have everything 100% automated throughout your leasing cycle, doesn’t mean you shouldn’t focus on your relationship with them. Not only will you best prepare them with the move-in details they need to know, but you’ll also set expectations on how they can best communicate with you.
Consider working a video conferencing meeting into your process like Zoom. It will give you a chance to truly onboard them and demonstrate any technology you want to highlight, like an online resident center where they can pay their rent and submit maintenance requests.
#8: Stay Focused on the Long Game
In times of hustle and stress, it’s easy to lose focus on the big picture and how it’s hitting your bottom line. You can stay grounded by regularly revisiting the property management KPIs that best measure your leasing and business success.
Some other KPIs that you should track on a monthly basis are average days to lease, vacancy/occupancy rates, and how your leasing contributes to your overall revenue as its own profit center. And, of course, the best lead-to-lease conversion is the 100% that you get when a good resident renews a lease.
And that just about does it. We hope you enjoyed this video and learned some practical actions you can take to treat your lead-to-lease conversion like a true technician with technology that has your back.Read more on Marketing