Apartment managers are constantly striving to find new tenants but often, retention proves to be far more lucrative. The Harvard Business Review published a cornerstone study which clarifies the cost of acquiring new customers is anywhere from 5 to 25 times more expensive than retaining an existing one.
With that in mind, apartment managers must recognize that resident retention strategies are make-or-break factors in successful property management. Keeping goodwill high and incentivizing continued residency are the key components to a solid ROI.
On the upside, the barrier to change is much higher for renters than considering something simple like a new brand of shampoo or breakfast cereal. Apartment tenants who want to change living situations have to deal with the high cost of moving, all of the time involved in packing and finding a new home, and just the overall inconvenience.
For the most part, tenants prefer to stay in the same place. However, poor service and rising rental costs can easily make them reconsider. To prevent this from happening, apartment managers should entertain preventative and proactive measures to keep tenants happy, along with ongoing ideas for building a community that encourages residents to stay.
Preventative Resident Retention Strategies
The crucial component in retaining residents is attentiveness. The landlord must be prepared to respond to all service requests quickly and with minimal disruption. In the event of a delay, communication makes all the difference. Promptly notifying residents why a project can’t be completed in an expected timeframe will maintain goodwill and keep resident trust high.
This will require establishing processes for reporting issues and assigning work orders for repairs. Simple phone answering systems still work well for smaller operations. Meanwhile, larger companies with many properties are gravitating toward online maintenance portals where tenants can put in requests. There are even more feature-rich online resident portals that most tenants prefer—offering not only maintenance reporting but also electronic payment and social connections to those living in the apartment community.
Regardless of the system chosen, it’s crucial that managers select one that makes the process of submitting requests for service seamless for residents. This platform should effectively facilitate communications between the landlord and the tenants so all steps in responding to a problem are documented clearly. Ensuring timely maintenance, repairs, and effective communications will go a long way in securing renewals.
Proactive Resident Retention Strategies
In 2018, renters who chose to renew paid an average 4.5% increase on their rent. Although most U.S. cities experienced increased retention rates, San Diego was among cities where retention rates were far below the national average.
A good way to maintain tenants while maximizing rent increases is to provide amenities to residents that will save them money in the long run. Here are a few options:
Pet grooming parlors and amenities: Individuals who have their pets groomed can expect to pay anywhere from $40 to $80 every six weeks. The alternative is to do grooming at home, but individuals typically don’t have the space for it and prefer not to deal with the mess.
Having an on-site pet grooming parlor allows individuals to take advantage of much cheaper DIY options. Setting up tables, power outlets for electric razors and trimmers, and large sinks or dog baths with detachable sprayers allow individuals to enjoy self-service, salon-quality grooming while saving money—and mess.
Other attractive pet amenities include water stations, dog parks, complimentary pet treats, and pet-of-the-month awards. All of these features support a pet-friendly atmosphere that makes animal lovers feel valued.
Fitness centers and related amenities: In Los Angeles, the average gym membership costs an individual about $70 per month, making on-site fitness centers a major cost savings advantage for renters. By offering facilities where individuals can work out and attend fitness classes, apartment managers make their community more appealing and incentivize renters to stay.
Steam rooms, jacuzzis, tanning beds, and spa services offer added benefits for tenants. These high-end amenities elevate a multi-family dwelling into the luxury category, which is great for retention as tenants in luxury facilities realize the many reasons renting is better than buying.
Business centers and coffee stations: Commute costs, automobile maintenance, and time spent in traffic are important concerns for those living in heavily-populated cities like Los Angeles. These travelers must also factor in additional costs like parking, tolls, and overall wasted time away from their jobs and their families.
On-site business centers provide a place for individuals to work from home without the need to invest in a home office. Instead, they can telecommute from their apartment complex while enjoying all the features of a standard office.
Self-service coffee stations within a business center will enable tenants to rejuvenate with a fresh cup of coffee, offering yet another attractive reason to stay.
Ongoing Resident Retention Strategies
A strong sense of community will help apartment managers build retention as the dwelling becomes so much more than the place the resident lives. It’s the spot where they connect with friends, meet new people, and spend their leisure time. Apartment managers can build this sense of community by offering events based on engaging amenities.
Probably the most popular option is the traditional community pool party, but managers can think outside of the box for even more unique ideas. A manager of a building with a running trail could, for example, set up a running club for residents to jog together.
California communities with dog parks could set up on-site dog shows with prizes. Even bringing in the occasional box of donuts to the community coffee bar can encourage tenants to stop and chat with other residents. Any event that gets residents socializing will help build a sense of belonging to your community.
Retaining Your Residents
When considering whether to stay in an apartment or move, most renters are going to look at the numbers. If they can justify paying an increase in rent because other expenses will go down, they’ll stay. Adding popular amenities like dog parks, fitness facilities, and business centers is a great way to keep your renters satisfied and maintain a competitive edge over their other options.
Using proactive, preventative, and ongoing resident retention strategies will keep community satisfaction high and turnover low. Strategically offering amenities and incentives that reduce tenant expenses, provide top-notch maintenance, and offer attractive community interaction are key ways to accomplish this.