In the realm of property management, the primary focus for leasing associates has traditionally been on securing residents for the immediate term. Unfortunately, attention toward retaining them beyond the initial lease period has often been limited, and the lifetime of a renter has historically been capped at 18 months.
Even when the emphasis is on resident retention, it tends to be narrowly centered around questions like, “How can we retain Resident A in Unit B?” and not supported with much technology.
Given the recent softening of demand for new leases, it is prudent for executives in the industry to adopt a broader perspective to resident retention. Rather than viewing residents only as customers of one community and one apartment home, operators should view them as customers of their brand and their entire portfolio.
This modern approach begins with gaining more visibility into the ever-evolving needs of residents and can play out in a number of ways, including:
1. A new home within the same community
Recognizing that circumstances change for renters during their lease, operators should be attuned to potential shifts in family dynamics, remote work arrangements, or other lifestyle changes. These changes can potentially lead to the need for a larger or smaller home. Typically, this is when residents look to move. Operators often accept the pending departure with a shrug and watch the resident move on—a resident they likely paid a lot of money to acquire.
Oftentimes, they aren’t aware of the reasons why the resident is leaving or that they may actually have solutions that meet the new resident requirements. In fact, data shows that many residents will decide to stay if their needs can be met by simply relocating them within the property.
2. Move the resident to a sister community
Acknowledging that retaining a resident at their current location may not always be feasible, especially in cases of job-related relocations, operators can suggest sister communities in a new area. This way, even if the resident moves from the original community, the operator retains the renter within its broader ecosystem and reduces acquisition costs.
3. Monetize the move-out
Sometimes, no matter how many options are presented, remaining at the community or relocating elsewhere within the portfolio simply isn’t achievable for a departing renter. For example, perhaps they are relocating to a city in which the operator does not have any sister communities. Typically, this means it’s time to say a gracious goodbye and wish them the best. In 2024, however, tools are available to help operators share leads within a closed network. This innovative approach allows operators to create a new revenue stream in the event that they are unable to meet the resident’s needs.
In many cases, residents who need to vacate a particular unit can be placed elsewhere within an operator’s portfolio. Adopting a holistic perspective on resident retention offers numerous benefits, including reduced customer acquisition costs, improved portfolio performance, and increased resident lifetime value. Keeping residents within your portfolio for the long term is easier said than done. First, operators have to deliver rich living experiences and excellent customer service that makes residents loyal to your brand.
But operators also have to provide residents with fair and suitable options at renewal. And that means making sure renters are being communicated with throughout their entire lease. Operators regularly dedicate an abundance of energy toward attracting new residents, yet too often they seldom check in with residents throughout their lease term to determine if any newfound needs have arisen.
With visibility into those renter needs, operators can give residents true optionality before renewal and increase the likelihood of keeping them in their ecosystem.
Ultimately, recognizing that retaining a customer extends beyond keeping them in their current residence can significantly impact the bottom line. Executives should embrace the tactics and technology that provide a comprehensive approach to resident retention, acknowledging the diverse needs of renters and the nuances of the renewal process.
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