Resident retention is normally the forgotten factor in property management, as the art of apartment marketing and leasing to new prospects is still studied, sliced, diced and pureed by the apartment industry to find optimal strategies to getting people in the door. In fact, the better a community reaches apartment marketing and leasing, the more it could mask its shortcomings on the resident retention side. So much effort is made on the leasing side of the business our front line troops are called “Leasing Professionals.” Concentrating on Leasing is not a bad idea; however, neglecting the other half of your organization can alienate your residents, cause high turnover, and severely impact your important thing.
Ki Residences Sunset Way That is more important: Resident Retention or Apartment Marketing?
When we discuss the value of Resident Retention, it isn’t to state that apartment marketing isn’t also vitally important. In other words, to improve retention, we ought to not sacrifice leasing. Having said that, an increase in retention is vastly more beneficial than an increase in leasing. This should not be a surprising concept. When comparing a new resident to an existing resident, the existing resident is a lot more profitable, with almost no make-ready costs and no loss because of vacancy. Additionally, a long-term renter is much more likely to refer friends and coworkers when compared to a new renter would.
When you see the difference in profitability between your two groups, it really is shocking just how much more we spend on prospects. While prospects and new residents get the advantage of cheaper rent and extensive marketing, existing residents, those who pay the bills, often obtain the short end of the stick. This difference can result in alienation of one’s current residents, a situation you should strongly avoid.
Why is resident retention not on the radar?
Even though we all understand the concept of resident retention, surprisingly little is well known about how to accomplish it. Therefore, most communities choose to either ignore everything together or choose methods that not achieve the expected goals. Let’s first look into a few of the most common mistakes made in current retention “techniques.”
Customer Service and Maintenance
Let me be clear relating to this: Customer support and maintenance aren’t resident retention programs. We constantly hear how important both of these items are, which is completely correct. However, rather than going above and beyond, these things are an expectation, not a perk. Especially for Class A and Class B properties, residents do not see strong maintenance and customer service as a luxury item that they ought to be impressed with. They instead see these things as a required section of living at your community. Look at a restaurant advertising that its food is served warm. Isn’t that expected at a restaurant? And if this is the best trait the restaurant can provide, would you really expect the meals to be that great? For a community to advertise a feature that needs to be standard, they’re actually implying that the others of their service isn’t too impressive!
The infamous summer party…
Summer parties could be a fun perk, but are rarely an excellent investment. To start with, summer parties can be quite expensive if food emerges, generally which range from $1,500 to $3,000 for a 300-unit community. Ironically, you cut costs when you get a low resident turnout at these events. Imagine the price if 100 percent of your residents attended! However, more than likely, you’ll only have around 25 percent of your residents arrive. Of those, it’s likely that only about 25 percent has a lease coming up to create an impression on the renewal decision. Therefore, you are impacting only 6 percent of one’s “target audience.” This means for an average community of 300 units, you’re spending roughly $2,000 to attain 18 residents – that’s $111 per resident! Even if the party influences a few others that renew later in the entire year, investments in these parties do not justify the reward.
So what are some programs we can implement?
Firstly, know your community. Fair Housing laws limit how much demographic information we can keep about our residents, but you should at least have an idea of the different faces of your community. Additionally, rather than having one giant one-size-fits-all party, it is possible to coordinate several smaller, targeted parties throughout the year. Having more frequent parties enables you to target different demographic groups in your community at differing times instead of “putting all your eggs in a single basket” approach of large summer events. Spacing these events throughout the year will also guarantee your events coincide with all of your residents’ renewal periods, thus giving you the largest impact possible. Here a few ideas that can you can explore that are less expensive:
Bridge or Mah Jongg Night
Dinner Rotation – This could be quite popular! Have an indicator up period for singles or couples. These groups then take turns rotating among their apartments hosting small dinner parties for every other.
Poker Night at the Clubhouse (for prizes rather than money)
Ice Cream Social
Also, remember that you have purchasing power! Most events around town offer group rates you can transfer to your residents. This can make them feel part of an exclusive club with money saving deals all the time!
The future of resident retention
Have you heard the term “Resident Portal?” In the event that you haven’t, continue reading! A Resident Portal is essentially a website for your residents, adding a genuine social element to your community – consider it a “digital clubhouse.” In the event that you haven’t noticed, almost all residents have a social presence online. Resident Portals take that concept and merge it with traditional apartment properties to produce a true “community” environment. A basic Resident Portal includes a community calendar of events, utility sign-up features, maintenance requests, and online rent payment. However, several resident portals offer much more in terms of a residential area social experience. These expanded resident portals range from about $125/month to $200/month for a 300 unit community, meaning you can aquire a whole year of service for the same price of one summer party. When done properly, resident social interaction can create strong emotional bonds in the middle of your residents, leading to impressive improvements in your retention rates.