In a competitive housing market where renters may be priced out of buying, rental markets tend to thrive. Recent occupancy rates have been as high as 97% and home prices are skyrocketing. Today, multifamily’s challenge is not about finding qualified renters to sign a lease, it’s ensuring they stick around and renew.
While the average national retention rate is ~57%, over 40% of renters are still not re-signing their leases, leaving ample opportunities to improve retention instead of dealing turnover costs and fierce competition.
Resident retention is the rate at which renters decide to stay at your property over multiple rental periods. It’s one measure of resident satisfaction.
Renters who stick around feel a sense of contentment with their situation, they consider their apartment home, and it’s fulfilling their needs.
But, retention rates can also be a tool to help you determine potential areas of improvement and opportunities for your portfolio.
If you’re losing great residents, who are often hard to find in the first place, then you may need to be more proactive in your approach to renter retention.
A low retention rate can also mean you’re potentially leaving money on the table. Here’s why:
Lost rent for vacant properties: When you have units sitting empty, you’re losing rent while also still paying for some utilities, such as heat or electricity. If your property is vacant for a while, that can add up.
The screening process: Finding new renters is often a time-consuming process, especially in an era of increasing rental application fraud. Beyond the marketing expenses to find new residents, giving them tours, and screening may take upwards of four to ten hours for each applicant.
You’re paying for turnover: When renters leave, you may have to prep it for the new resident. That may be as simple as bringing in a crew for a quick clean or you may need to take weeks repairing or upgrading the units. Even if you are doing it yourself, there’s value to your time and energy.
So it’s worthwhile to explore some strategies that will help improve retention rates and keep residents happy exactly where they are now.
We’ve found that our partners have turned to 9 resident retention ideas to help reduce their turnover rates and keep renters re-signing.
Younger renters, think Millennials and Gen Z, make up about half of all active renters. So, it does make sense to tap into what they’re looking for in apartment communities. Popular requests for these renters include:
The pandemic has helped swing the pendulum away from micro-apartments and into units that offer more space, including outdoor areas such as patios and yards or separate spaces for offices and work-stations.
Community matters to these younger generations, they want amenities that help foster a sense of community among residents and encourage people to get to know each other.
These renters also like the idea of having more amenities that make their lives easier, which can include smart-home features and community Wi-Fi. But, having a super high-tech home is not a prerequisite.
Renters want to feel safe and secure in their apartments. So feature that help add these measures, such as smart locks for non-resident visitors and package lockers for mail security can go a long way.
Of course, traditional amenities still remain popular. Renters prefer having washers and dryers in-unit, or in the building, air conditioning, and more soundproofing, too. While it may not be financially feasible to outfit your entire apartment complex in smart home devices, there are ways you can still learn what renters want and make small changes that can give you a solid return on investment.
One area property owners and managers can look to improve renter retention rates is communication.
While you may think that your residents are happy to not hear from you at all, the reality is that adding more personalization to your communication may go a long way to improving your renter experience.
Today’s consumers demand personalization. And that goes beyond shopping at their favorite stores or getting served ads online.
As you interact with your residents, keep personalization in mind as a way to help foster engagement.
Create a welcome packet that gives you new renters all the information they need for getting set up in their new home. Include who to contact if they need something and resources for getting set up with utility providers.
You have renter information from their application process, so you can use that to provide them with personalized notes welcoming them to the community, wishing them a happy birthday, and sending holiday wishes.
Even if you don’t have high turnover rates, it never hurts to tap into how your residents are feeling. Set up online surveys that ask them to share their thoughts on apartment conditions, amenities, maintenance, and what you can do to improve their experience.
If you want to get a sense of how your residents feel about sticking around, think about sending them a renewal letter a few months before their lease is up. In it, you can remind them of any new features or amenities you’re offering, such assecurity deposit insurance.
Improve your turnover rates by offering Rhino as part of the renewal process. Rhino is smart, affordable insurance that replaces the need for a cash deposit, and offers financial relief for renters when they move-in and when they renew.
With Rhino, you can replace the old outdated method of collecting a cash security deposit, and replace it with insurance. Renters pay a more affordable monthly fee* and property owners and managers get flexible coverage against rental property damage or missed rent — at no cost to you.
Rhino is a great way to help you improve your retention rates. Think of it as another potential amenity to offer renters.
If you make the switch and decide to offer Rhino at renewal, you can give your current resident’s security deposit back to them, or apply it to future rent. That helps your residents save money while still reducing your risk of damage or non-payment.
As the rental market continues to see record demand and Americans continue to frequently move, implementing these resident retention ideas should help you minimize residents’ costs while maintaining quality renters. To learn more about how Rhino can help you boost your retention rates, get in touch with one of our experts.
*Pricing will vary by individual renter. Actual rates determined based on the specific information provided to Rhino. Monthly payment plans may not be available to all renters.