The old Texas saying “Dance with who brung ya” was a favorite of former Texas Longhorns head coach and legend Darrell Royal.
Go with the players who best help you win. Retaining existing residents – especially those who have danced the dance with your property for many years – is critical in keeping apartments full.
Build Value by Building Relationships with Long-Time Residents
“Historically, we get so focused in our efforts to get new customers that we forget at renewal time about those who have lived with us and paid their rent for a year or more,” “We spend our money and time on marketing to new residents, even standing on the corner banging our drum, to drive new business. Too often we forget the most important thing – keeping people we’ve got.
“We have improved greatly through the years. However, we still have room for improvement.”
A full roster of prospects can make it tempting for any head coach or property manager to look the other way when a long-time resident doesn’t renew. Having a call/wait list is insurance. But the cost for turnover is very expensive, an industry fact. For some properties it can be $3,000 or more (vacancy loss, marketing expense, labor costs, concessions and other costs) to get an apartment ready after a vacancy. The rule of thumb is that it costs five times or more to replace the resident than to keep them. With an industry-accepted 50-55 percent turnover rate, we’re talking serious money.
Our industry doesn’t always think about the impact that a long-time resident has on the property, both in the value of the community but also the property. “If they stay with you for 10 years, they’ve bought the darned apartment,” she said. “Think about that: if you use $1,000 as a rent average per month, times 12 months times 10 years, that’s 120,000.”
Improve Resident Retention with Genuine Expressions of Gratitude
Property managers can retain long-time residents with a genuine expression of gratitude; something much more meaningful than a digital trinket or gift card that the resident could potentially use somewhere else. And in the process, the apartment can add bottom-line value to its property. “It’s a great idea to offer some incentives for renewals while being smart enough to retain those incentives at the property. At the same, the resident is being honored for having been there and paid the rent, and encourages them to renew. The incentives can be more of a perceived value than anything, and could be part of an ongoing rewards program that rewards residents the longer they live at the property.”
Here are five simple incentives for just a few hundred bucks that will encourage residents to continue living at the property and improve resident retention rates:
1. Make Reserved Parking a Perk for Loyal Residents
Parking is an issue in huge urban areas, and offering a resident his/her reserved space can be very attractive. Residents may actually be willing to pay additional for the parking, which could be rolled into the lease agreement.
2. Bring Back that New Apartment Feeling
Turn that apartment back into that “brand new” unit simply by painting and cleaning up. Ann contends that some people move out because the apartment is dirty. The resident may never have cleaned their oven or there is mildew in the shower. Contract a bonded maid service for half a day to give the place a good scrubbing.
3. Create a Sense of Ownership
One perk to home ownership is that any out-of-pocket improvements made can add to the long-term value of the property. While renters may want to improve their apartment, they are not getting potential return on the investment because the property is not theirs. However, if the apartment property makes an upgrade as a reward for long residency and renewal, the renter gets the benefit without dipping into their wallet. Obviously, the property benefits in value. The improvement can be as simple as putting in a nice light fixture in the dining room or adding a ceiling fan in a bedroom.
4. Become a Part of the Routine
Drive by any national coffee chain in the morning and you’ll see a great opportunity. Tell your residents to avoid that drive-thru on the way to work by stopping the office for a cup of premium coffee to go. The amenity will not only save your customers money and commute time but let’s them know they are valued.
5. Establish a Sense of Community
It is sad that we’ve lost the sense of community in our country. Recent events in Cleveland support that. And when residents frequently see moving vans on the property and residents leaving, that further weakens the neighborly bond. Apartments can plan simple events or social gatherings, usually at a nominal expense, so that residents gather and get to know each other. People are less likely to move if they have strong bonds with neighbors, and property managers should help knit the apartment community together.
A show of appreciation to a long-time resident at renewal time, or any time for the matter, doesn’t have to be over the top.
“Our residents need to feel good about where they live, and it’s up to the property to make sure that happens. While this is a business, it’s also a lifestyle for our residents. It is their home so encourage them to stay.”
That, my friends, is dancing with who brung ya.