Nobody likes losing a good customer, but somehow the multi-family housing providers retention average is not that great. Statistics indicate that about half of the industry’s tenants will not be signing another lease with their current community. In fact, in February of 2016 MPF Research, a division of Real Page, reported that Metro Denver had the sixth worst lease renewal rate of any metropolitan area in the country at 48.3%. So…What can you do about it?
It is easy to attribute low lease renewals as a trend in the youthful culture of Denver; you might defend your stance by saying, “It’s a city for Millennials and young professionals are very mobile and everybody is experiencing it.” You wouldn’t be wrong, Denver has seen an incredible influx of twentysomethings packing up and leaving their families to start anew in the Mile High City metro area with nothing here to keep them grounded. However, just because everybody is experiencing high rates of non-renewals (the average did raise after all) it doesn’t mean that your community can’t beat the odds.
The vast majority of wisdom to be gained about this problem comes from interacting with your tenants who have elected to leave your community for another apartment community in the metro area. Whenever a resident non-renews their lease, you should always conduct an exit interview/survey.
The tenant may provide some initial pragmatic insight into why they are leaving, such as needing a bigger space, moving closer to work, combining living space with a significant other, lower rent or buying a house, etc. There are some things you can’t change, like needing to be closer to their place of work which could serve to inform you and trigger a decision to advertise your community to employees of nearby companies. But if you discover a trend in reasons for non-renewal not related to these valid reasons, you may uncover a problem that needs to be addressed either with the facility or the behavior of other residents. Additionally, through an exit satisfaction survey, you are likely to discover the little-known things that tenants appreciate or that tenants find irksome in your community.
With comprehensive completed exit surveys, you should perform an annual review to identify what kind of living space tenants typically leave your community for. If the tenant moves into a single-family home when they leave your apartment community, there is not much you could change to accommodate the needs of that tenant. However, if you see that your residents are moving to other apartment communities, especially if several of your residents have non-renewed and moved to the same community, it would be prudent to undertake an objective comparison of the communities.
Each tenant that moves to a new apartment complex does a lot of research for you by completing a multi-point inspection of several communities and selecting the one that they believe best works for them. Remember they also went through this same process when deciding to move into your community. By comparing your community to the one into which your tenant has moved, you may be able to pinpoint what amenities or cosmetics their new community has that appealed to your resident and motivated them to non-renew and move into this community.
Once you have the information in front of you, all it takes is determining if you can reasonably make adjustments that will serve to motivate other residents to renew and improve your rate of resident retention.