There’s no exact formula to guarantee a lease renewal, but property managers do their best to reduce turnovers.
While focusing on retention is always a best practice, it's perhaps even more critical in a market where rent growth is decelerating in many metros, and more new supply comes on line every day.
Houston-based Camden Property Trust manages more than 59,000 apartments nationwide. Yet, each community tweaks its retention strategies based on local factors, says Kristy Simonette, the company’s senior vice president of strategic services.
Here are the top three factors Simonette believes residents consider when deciding if they will stay or leave:
Location vs. community. It's the age-old real estate adage, but it can be offset.
Camden has 170 properties and sometimes residents may not be satisfied with where a property is located in relation to work, school or other commitments. However, Simonette believes other things, such as amenities and community, can make up for this factor.
“If you’re exceeding on all those other points, sometimes people will drive a little further to work or they will make some concessions,” she says. “If you’re just winning them over on the value of the community [they may stay].”
Pricing transparency. The last four years have provided a great atmosphere for managers to push rent, but sometimes that will drive residents to leave, Simonette says. The Camden staff encourages residents who are considering a move to shop around and compare prices.
“We offer fair market prices,” she says. “We think that if our residents do go out and shop and compare, they will find that we are fairly priced and competitive in the market. So many times, if you get a rent increase it’s the sticker shock of it. We help people, our residents to understand, this is market price.”
However, sometimes people will leave anyway and there’s nothing you can do about that.
“So sometimes we overcome it and sometimes we don’t,” she says. “Sometimes people cannot afford to absorb a rent increase.”
Service. At the end of the day, residents want to be treated like valued members of the community. Simonette says the Camden team strives to deliver excellent customer service across the board, from the maintenance staff to common-area amenities.
This is yet another lesson operators should borrow from the hospitality industry: Beyond the bricks and sticks, beyond the amenities, service with a smile goes a long way toward customer satisfaction.
“We always want to be good to our residents and take care of them,” she says.
Lindsay Machak is an Associate Editor for Multifamily Executive. Connect with her on Twitter @LMachak.