Apartment turnover is a fact of life for landlords and property owners. However, excess turnover need not be. By establishing practices to get your tenants to renew their leases and stay in the long term, you not only cut costs: you also enhance the desirability of your community.
Reductions in turnover benefit tenants, property managers and landlords alike. Read on to learn what you can do to improve your tenant retention and avoid the expense and headache of excessive turnover.
Since the start of the new century, turnover rates have been high across the nation. Accordingly, any opportunities related to reducing turnover are that much more impactful. In 2019, the national turnover rate was 47.5 percent. Significant, but a far cry from the 65 percent of two decades ago. There were variations from one region to another. For example, turnover ranged from 38.1 percent in Milwaukee to 50.6 percent in San Antonio.
It is true that turnover can aid rent growth. However, an average of eight moves a month in a 200-unit community is almost a 50 percent turnover rate. Always know your “days vacant” average. Use it as motivation to create a community that is as inviting as possible.
Start or Expand a Resident Retention Program
On the other hand, a tenant may experience a series of frustrations akin to the drip, drip, drip of a leaky faucet. Often, it is not a one-time event that sends them packing. Rather, it is mounting stress over unresolved concerns. It’s the drip, drip, drip that eventually causes a flood.
Address these avoidable losses by developing a specific plan to retain your tenants. Start with the basics. Many ideas are simply “customer service” best practices, including:
- Be attentive and respectful
- Be proactive about maintenance
- Address maintenance requests without delay, and follow up
Here are some potential features of a tenant retention program.
Consistent, Positive Communication
Communication is a two-way street. Solicit tenant feedback on a regular basis. You can only build goodwill with sincere, caring inquiries. Ask: How do you like living in the neighborhood? Is your apartment home living up to expectations? If not, what can we do to remedy the situation? Learn of concerns as early on as possible. Discover what upgrades a tenant would value. Better places to walk pets? A certain piece of gym equipment? Replacement of an outdated stove?
There are other benefits to consistent communication. Property managers who stay in touch with residents will learn of pending moves in a more timely way. For example, timely exchanges may reveal a tenancy destined to end due to a job transfer.
Also, a tenant may think about leaving only because they have a vague sense that there might be something better out there. An astute property manager might help such a resident better understand the realities of the market and the expenses associated with such a move.
Property management software facilitates communication as never before. Set up alerts three months in advance in your property management system. It’s simple to schedule emails that demonstrate a sincere interest in your residents. This digital correspondence should solicit productive feedback at every opportunity.
The American Apartment Owners Association also suggests sending out regular property updates. Let them know about scheduled maintenance, common area painting, and even local road work. Communication makes tenants’ lives run smoother, and it lets them know that you care. Ask about preferred maintenance times. For most tenants, there’s a big difference between early morning and late afternoon. Holiday cards are a simple gesture that builds goodwill. Finally, make paying rent as convenient as possible. Consider an online payment portal if you don’t already have one.
The personnel in the front lines are the face of your operation. Courteous and cooperative personnel build loads of goodwill over time. In a healthy community, there’s a sense that we’re all in this together.
Common Sense Rule Enforcement
Fostering a collegial, reasonable environment pays off. Don’t leave tenants hanging. Be specific about the consequences for repeat offenses, such as loud, late-night partying. Put expectations in writing, and enforce them with fairness and composure. Have a conversation so you get the tenant’s side of the story.
Proactive Lease Renewals
Don’t leave good tenants wondering if you want them back. Reach out well before the end of their lease. Express your interest in having them renew, and make it attractive.
Be keenly aware of rent trends in your community or neighborhood. Many longer-term tenants understand the need for an occasional increase. They know that the cost of landlord-paid utilities and property taxes increase over time. Still, your rent levels should be in line with those charged locally for similar accommodations and amenities.
Time communication so you’ll suggest an incentive well before the tenant thinks about moving. Give your long-term residents perks they’ll appreciate. Professional deep cleaning and carpet cleaning are a couple of examples. Timely offers of fresh paint, flooring updates or other unit upgrades go a long way toward retaining tenants. Gauge your offerings to your target demographic. If you don’t offer the amenities your tenants desire, your competition will.
Once a tenant signs a new lease, make it official without delay. Consider offering a token of your appreciation, some thoughtful gesture expressing gratitude for the renewal.
Benjamin Franklin observed, “It takes many good deeds to build a good reputation, and only one bad one to lose it.” Excellent tenant retention enhances your reputation. It is very important, even if it is not easy to place a dollar value on it. How you’re thought of is one key to your long-term success when it comes to attracting and retaining great tenants.
Learn More About Tenant Retention
To read more articles with tips and advice on how to maintain long-term tenants, visit draperandkramer.com.