Overall Renter Satisfaction Holds Steady
For almost three years now, there has been little to no change in overall resident satisfaction. Since the end of 2014, overall satisfaction scores have wavered between 76.6% and 76.8%. This quarter proves no different, with 76.7% of residents reporting that they're satisfied overall with their living experience. However, out of the top U.S. markets, there were only three cities with increases in resident satisfaction compared with a year ago: Atlanta, Denver, and New York saw resident satisfaction increases of 1.6%, 1.6%, and 2.6%, respectively.
While the other markets experienced downturns in satisfaction compared with a year ago, all but one city saw satisfaction decrease by less than 1.0%. The city with the largest decrease in satisfaction from one year ago was Dallas, with a drop of 1.8%.
Has Renter Renewal Intent Reached Its Peak?
Over the past year, the number of renters intending to renew nationwide has been on the rise, jumping from 51.4% to 54.0% in a relatively short time frame. That trend may have peaked, however, given the most recent data. This is the first quarter since Q2 2016 that there's been a decrease in renewal intent. With a decrease of 0.2% this quarter, renter renewal intent has now dropped to 53.8%.
One factor that may be contributing to the decline of renewal intent is the value residents perceive in regard to how much they're paying for rent. Over the past year, the percentage of residents who are satisfied with the value for amount paid has been trending upward. As with renewal intent, however, this past quarter revealed a decrease in resident satisfaction with value for amount paid, from 55.0% to 54.4%.
At the market level, Atlanta and Boston represented the largest increases in renewal intent, at 3.8% and 4.7%, respectively. As with the national scores, the satisfaction with value for amount paid can provide insight into the increases.
While Atlanta underwent a mere 0.6% decrease in satisfaction with value for amount paid, the city has the highest percentage of renters who are satisfied with value for amount paid, at 63.0%. Boston comes in at a close second, at 59.6% and a 1.5% increase versus last year.
The two markets with the largest decreases in renter renewal intent this quarter were Dallas, with a 3.4% drop, and Miami, with a decrease of 4.0%. As we've seen with the markets that had the largest increases, Dallas also had a corresponding change in satisfaction with value for amount paid. Dallas suffered the largest decrease in satisfaction with value for amount paid, with a 2.7% decline versus last year.
Conversely, while Miami underwent a decrease in renewal intent, it experienced a significant, 3.3% uptick in satisfaction with value for amount paid. A growing number of Miami residents are satisfied with the value they receive for the amount they pay for their apartment, yet fewer and fewer residents intend to renew their leases. So, whereas Miami residents may be happy with the value for amount paid, other factors beyond rental rates are driving them away from their communities.
Community Management Affects Renewal Intent
Rental rate and location continue to top the list of renewal decision factors for this past quarter. While these are uncontrollable factors, community management is a controllable factor that holds steady as the third-most important influence on the renewal decision.
Nearly half—47.3%—of residents likely to renew indicated that community management affected their renewal decision. For these residents, community management ranked above rental rate by 3.2%. Residents who are unlikely to renew ranked community management as the second-most influential factor in their renewal decision, with 30.5% of residents selecting the factor. Yet again, data are proving that community management is a controllable factor that significantly influences whether a resident decides to renew his or her lease.
Over the past five years, overall satisfaction with community management has steadily decreased, from 77.9% in Q3 2013 to 74.2% in Q3 2017. Residents are most satisfied with management's professionalism and courtesy, the convenience of office hours, and rent-collection procedures. However, residents are the least satisfied when it comes to interacting with management on a more personal level. Satisfaction with accommodation of special requests and problem resolution ranked the lowest of all management areas, with scores of 68.4% and 67.9%, respectively.
Influence of Community Management Throughout the Resident Life Cycle
Throughout the resident life cycle, residents' interaction with community management greatly influences their experience at a community and, ultimately, their decision to either renew or leave a property.
Eighty-four percent of prospective residents said staff and management were a factor in their leasing decision. Furthermore, 87% of prospects who decided to lease at the community reported staff and management was a factor, while 75% of prospects who decided not to lease at the community also considered it a factor.
Community management not only influences prospects to lease if they have a positive experience with the staff but can also push people to lease elsewhere if they have negative interactions with the staff.
For residents who have moved out, community management ranks third on the list of what could have been better to have enticed the residents to stay, behind rental rate and nothing. Forty-one percent of residents said their interaction with the management team influenced their value perception of the community overall.
Community Management Drives Positive Resident Experiences
Residents satisfied with their management teams are 77.1% more satisfied overall and 73.1% more likely to recommend the community to friends than their dissatisfied counterparts. The significant disparity between the scores illustrates just how important positive interactions with community management are to a resident’s overall experience at a property.
While there are many aspects to address when improving interactions with community management, an actionable starting point is improving response times. Community management teams that respond within two hours of a request have an overall resident satisfaction rate of 91.9%, and teams that respond within 24 hours still uphold a high satisfaction rate, of 82.7%. When teams take more than 48 hours to respond, resident satisfaction with management drops to just 26.8%.
You can reach Kingsley Associates via Shelby Lee, the firm's marketing manager, at [email protected] or (770) 908-1220.
