By Neil Fjellestad and Chris De Marco
Is your apartment community a revolving door?
Some multi-housing specialists have estimated that it costs five times as much to re-rent an apartment home as it does to keep an existing resident. Multiply the cost to turn an apartment by the number of apartments in your community and multiply that result by the national average for resident turnover of 60 percent. This will give a ballpark figure of what vacancies could be costing your community annually.
Let’s say for example that the average estimated costs to turn an apartment home are between $2500 and $3000 (lost rent, clean up & replacement, advertising, time spent re-renting). Let’s take an apartment community with 125 homes. Multiply 125 by the lower estimate ($2500) and then multiply the result by 60 percent and the result is a potential $187,500 annually in lost revenue from turnover. It’s a lot cheaper to keep residents happy.
Customer relationship management (CRM) is key when it comes to keeping residents. Residents can be demanding with high, but generally reasonable expectations. They expect their grounds to be neat; their appliances, lighting and plumbing to work; their parking problems resolved; and a sense of being home. When there is a problem, they want a) management to be empathetic and b) everything resolved quickly with the minimum amount of inconvenience to them.
Service and convenience are the major reasons that customers choose rental housing and yet, studies have shown that a major reason residents leave is poor service. Ninety percent of residents say that there is room for improvement in the way that their communities handle their service requests. This is not something that residents will necessarily tell onsite management. Research shows that 95 percent of customers who are dissatisfied never complain to management.
The focus in the multihousing industry is generally on leasing, but it’s important that existing residents know that management still cares about them after the move-in process. Here are some suggestions to improve CRM:
• Create a Smooth Move-in Process – New residents should receive a signed copy of the lease and other documents. Everything in the apartment should be in good working order and “white-glove” clean. Consider giving new residents a “move-in” kit with helpful information, tips, coupons and contact numbers.
• Handle service requests quickly and have it done right the first time. Ask residents if there’s anything else you can do. Chances are that there is something else in the apartment that needs to be done and they forgot to tell you about it.
• Greet residents with a smile and a service attitude whenever you see them. Ask how things are with their homes. Resolve problems quickly and properly. Let residents know you’re happy to have them at the community. Treat everyone fairly and consistently.
• Residents are more likely to stay if they feel that they’re more than just “a name on the rent roll” to management.
• Survey existing residents to find out what’s going well and gather suggestions for improvement. Determine what services they would like to see. Some residents may also be more willing to give feedback if they have the option of remaining anonymous.
• Shop the Competition to know what alternative are offered in the market. It’s a good idea to know how your community measures up to the competition and check on any trends in the local market. For instance, are there any incentives or services that give other similar communities a competitive edge?
• Resident Meetings – Hold meetings at a time and place that’s convenient for most of the residents. Make it fun and offer incentives (such as free food) for attendance. This is a good opportunity to gather feedback and see what residents are thinking.
• Value Added Service – Are there any unique or special services by living at your community. Some communities offer discounted rates on or include cable, high-speed Internet access and/or other services. Another community might let residents use a vacant apartment to set up an onsite daycare center. Be creative.
• A Resident Newsletter is a great way to keep residents posted on community events and issues that might affect them.
• Resident Parties allow you to get to know and mingle with residents. This also fosters a sense of community.
• Renewal Rewards – Offer residents incentives to stay, this could include gift certificates, apartment upgrades (why should new residents get all the “good stuff”), and services.
• Intent to Vacate Interviews – Find out whether the reason a resident is leaving is something that management could easily resolve. The resident may be more willing to stay if management is able to work with them.
• Pay Attention to Frequent Complaints – Resolve these problems quickly. For instance when one manager failed to resolve parking problems, the result was a meeting planned and held by several angry residents that, besides discussing the main problem, aired several other complaints about management. Some residents threatened to leave over the issue.
• Conduct Exit Interviews – Know why your residents are leaving. This is crucial to pinpointing problems. Take a move-out gift to their place of employment. Imagine the impact on their co-workers.
• Train Your Team – A resident retention program cannot be effective if the front-line team is not properly trained to implement it.
The primary goal of property management should be to keep existing residents happy. There will always be some reasons why residents leave that can’t be controlled (buying a home, job transfers, etc.), but practicing CRM can help minimize the number of residents that leave.
Reducing turnover spells relief for your service team and allows your leasing to keep up maximum occupancy. This translates to better attitude onsite along with the time and energy to continue to provide excellent service. It doesn’t take long for consistent excellent service to brand an apartment community as a “great place to call home.”