Property managers are gearing up for what’s likely to be another busy leasing season. Prepping units, advertising vacancies, showing apartments, and completing piles of paperwork can be stressful—and for good reason: A single month’s gap in tenancy can eat away at a year’s worth of positive revenue.
This year, consider adjusting your strategy. Instead of placing emphasis on getting units re-leased as quickly as possible, focus on getting existing tenants to stay.
Here are 6 strategies for getting your residents to renew their leases this season.
#1: Start Retention Efforts Early in the Leasing Cycle
Moving is rarely a snap decision for renters. However, we often see property managers wait until the last minute—just a month or two before a lease is set to expire—to ask residents if they plan to stay for another year. At this point, any efforts that you make to get those tenants to renew their leases might already be too late. Your retention efforts need to start far earlier.
“We just started a new program to renew our residents [that begins] two days before they move in,” says Harlan Krichman, CEO of Philadelphia-based Resource Residential. “In an office of four leasing people, we have taken one person and turned them into a resident concierge: All they deal with is resident relations, and they are paid on lease renewals. They call on residents two days before move-in to see if they need anything. They call on the resident after they move in, then two weeks later, then two months later, and so on to maintain high touch throughout the lease duration.”
This ongoing communication may not seem as though it’s directly related to renter retention, but the fact of the matter is that happy residents are more likely to renew their leases. High-touch communication helps residents to feel appreciated and looked after. Just don’t wait until the end of their lease term to get started!
#2: Modernize Your Systems
Today’s renters are more tech-savvy than ever. They increasingly expect to be able to pay their rent online. They want to communicate with their property manager via text, email, or social media. They value the convenience of tech-enabled smart home devices, from learning thermostats like Nest to keyless entry locks.
Consider integrating more technology into both your business practices and your individual units. These relatively small investments show residents that you care about them and the property, which will increase their likelihood of staying another year.
#3: Gather (and Act On) Resident Feedback
Property managers and owners often assume that they know the ins and outs of each unit and each property under their care. However, until you’ve actually lived in a unit, you can’t really have a strong grasp of the little things that could be driving a resident crazy.
Case in point: I once lived in a unit where the front door opened into the living room, which then connected to the kitchen. The only light switch for the living room was between the living room and the kitchen. This meant that every time I left the unit, I’d have to shut the light off and walk through the dark before getting to the foyer. It wasn’t a huge deal, but it certainly wasn’t convenient. Adding a three-way switch in the living room, right as you open the front door, would have been a relatively easy fix. However, this wasn’t something that I felt like I needed to flag as an issue for the property manager—unless, of course, I was specifically asked.
This year, start surveying your residents after they’ve lived in the unit for a few months. Ask whether there are specific improvements that could make their experience better—then, act on them! This shows residents that you genuinely care about their comfort. Small actions will go a long way in terms of renter retention.
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#4: Make Strategic Property Upgrades
We’re at the height of a market cycle where tens of thousands of new apartment units have come online. This means that property managers and owners have much more competition to contend with. Most of the new apartments are at the top end of the price spectrum, so some owners can win out on lower prices alone. However, it can be tough to compete with the amenities these new apartment buildings offer: Pools, doggie daycares, bicycle repair stations, rooftop gardens—you name it, new apartment buildings seem to offer it all.
Reposition your property by making strategic upgrades. Can you transform an unused basement into revenue-driving storage space, or construct an outdoor patio where residents can gather? Smart investments can amp up the appeal of a property without breaking the bank.
The key here is to make investments that appeal to residents without drastically increasing rents, which could negate your other renter retention efforts. Not sure where to invest? See the point above about surveying your residents!
#5: Advertise and Incentivize Wisely
The influx of new apartments coming online has caused more property managers to offer rent concessions. Promotions like “one month of free rent if you sign a lease today!” can translate into a great deal for residents—but it could potentially lure some of your existing tenants away. If you’re going to offer rent concessions to new renters, you might consider offering a similar concession to anyone who resigns a lease this year.
“Having a $599 rent advertisement banner on your building when your renewal residents are paying $799 is just bad business,” says Mark Fogelman, president of Memphis-based Fogelman Management Group.
#6: Lock in Commitments Now
As we mentioned above, renters don’t usually make snap decisions about whether to renew their leases or not. They’ll typically poke around the market to see what else is available, weighing the competition’s offerings against their current situation. Property managers want to get ahead of this search as much as possible.
“We try to get out there and engage in the renewal strategy prior to residents starting to look somewhere else,” explains Laurie Lyons, partner at Cardinal Group Management, a Denver-based firm that owns and manages apartment communities across the country. “So if the industry is trying to get renewals 60 or 90 days out, we go 90 or 120 days out.”Read it on the #BuildiumBlog: 6 tips & tricks for increasing lease renewal rates! Click To Tweet
Despite your best efforts to get tenants to renew, some will inevitably leave. Some may relocate for work; some may choose to buy their own home this year; others may just want a change of scenery. Whatever the case may be, tenant turnover is bound to happen. As a property manager, however, your goal should be to keep the rate of turnover as low as possible to ensure that your clients’ properties stay profitable.
We’d love to hear your strategies for renter retention. What are some of the tactics you’ve employed to get residents to stay? Share your stories in the comments section below!Read more on Resident Management