Memorable touchpoints with the property manager can make the difference in whether residents stay or leave.
Hundreds of thousands of new apartments are now opening in cities and towns across the country. Many offer fancy new amenities and months of free rent to attract residents.
That’s awfully tempting for people who already live in rental housing nearby these new buildings. In a few overbuilt markets, the monthly rent at a new building may even be lower than what they are paying now.
Property managers are doing everything they can to convince residents they already have to stay. Every time a renter decides not to renew their lease, the community where they used to live loses thousands of dollars in lost rent and money spent to get their old apartment ready to attract new residents.
Many renters make the decision whether to stay or move based on experiences they have long before the end of their lease. Property managers can keep more of their residents by taking every opportunity to build relationships and trust with the people who live in their communities.
“Our resident retention program starts with that first connection – the day that you email or visit our website to inquire about a unit,” says Laura Khouri, President of Western National Property Management, which operates about 22,000 apartments, largely in California.
Managers struggle with fear of abandonment
More new apartments opened in the year that ended in the first quarter of 2024 than any 12-month period since 1986, according to RealPage. Even more new apartments are likely to open in the next 12 months.
With so many new apartments opening, renters have a lot of options. “I might have a resident that’s looking across the street at a similar building, but with something shiny and new in the units,” says Khouri.
In overbuilt markets, especially in the Sun Belt, many new apartment properties have been forced to offer concessions of free rent to attract residents. The effective rents of new apartments can often be lower than the rents residents are paying under their existing leases, according to RealPage.
For example, in Austin, Texas, average apartment rents have shrunk nearly 10% in the last 12 months. “Your current resident base generally could be paying a higher rate than incoming residents signing new leases,” says Brennen Degner, CEO of DB Capital, a firm that owns 3,000 apartments and manages 25,000 more.
That makes managers like DB Capital especially eager to hold onto their existing residents. “There’s a huge return on investment in just having someone stay,” says Degner.
Property managers can reduce turnover, even in a competitive apartment market. More than 54% of leases were renewed as of March 2024, with retention rates up about 110 basis points versus March 2023, according to RealPage.“Our achievement of stabilized occupancy is directly linked to our focused strategies on resident retention and satisfaction, which have been crucial in navigating the challenges posed by the influx of supply in some markets,” says Sharon Hatfield, Chief Operating Officerof Multifamily Asset Services, Americas for Cushman & Wakefield. “Adding value ‘beyond the living space’ has given us a significant competitive advantage.”
For example, the weeks when a new resident is moving in and unpacking their belongings may be the best chance property managers have to build a relationship with their new residents.“We try to make that an opportunity to engage positively with the onsite staff,” says Degner.
Residents remember
During the panicked first days of the pandemic, Western offered its residents an unexpected 5% discount simply to pay their rent for April 2020 by the third day of the month. “At the time I was thinking that I need to know what we’re going to collect,” says Khouri. “It gained us a ton of goodwill in social media...” Eventually, Western gave away more than $7 million in discounts during the first months of the pandemic. That’s a fraction of the total $42 million in rental income the company lost during the next 24 months of the pandemic due to eviction moratoria. Western had roughly 6% uncollected rent during the pandemic, compared to 2% normally. There’s good reason to think that if Western had not offered the discounts, more residents would have fallen behind, says Khouri. Western also still benefits from the goodwill it created with residents who still live at its properties.
“That wasn’t the point, it was just an unintended consequence that happened to be wonderful,” says Khouri.
Don’t miss maintenance requests
Once residents have moved in, property managers should pay careful attention to work orders. Solving these basic maintenance issues may be the most engagement an apartment company has with its residents, other than collecting the rent.
Residents can now submit work orders online through resident portals at the vast majority of large, professionally managed properties, according to recent reports from the National Multifamily Housing Council and RealFoundations. Customer relationship management (CRM) systems track interactions with residents. Property managers can now check on the status of work orders at their community with just a glance at their smart phone.
“Our target’s always 24 hours—48 hours at most—to complete all work orders,” says Degner. “It has a huge impact on [resident] retention.”
After the work is done, the maintenance team might leave a survey card with the resident to confirm that all the work was completed properly. If the property manager has not had any recent interaction with the resident, they might take the opportunity to call themselves to make sure the resident is satisfied,
says Degner.
Residents trade ice cream for lease renewals
Resident events create another opportunity for managers to connect with residents—and for residents to make connections with each other.
“A sense of community and belonging is increasingly important to residents,” says Hatfield. “By investing in these areas, we’ve seen measurable improvements in resident retention rates across our properties.”
Events range from Super Bowl parties and Easter egg hunts to simply serving coffee and donuts in the clubhouse. Property managers tailor the schedule of events to the interest of residents in attendance.
Western provides as many as one event every month at its Class A communities, and as little as just two a year at some Class B and Class C communities where fewer residents work from home and have time to attend. At all of these communities, resident events are becoming more important.
“Our budget has tripled,” says Khouri. Western now spends an average of about $30 per resident per month on these events, up from $10 per month five years ago.
“We invest a little bit more; we try to do something whether it’s big or small at every property every month at the very least,” says Degner. DB Capital spends between $500 to more than $1,000 on each event. A five-minute conversation with a resident would achieve the company’s goal to create a touchpoint with that resident. “We have seen some of the best turnouts with things like bringing in food trucks, ice cream trucks, raffles and giveaways,” says Degner. “But even if you get two or three people, there’s a return on investment.”
Conventional apartment managers can learn some lessons from managers of student housing properties, who have used events for years to boost occupancies.
“Our events target not just individual satisfaction but aim to foster a sense of belonging within resident groups,” says Rob Dinwiddie, Executive Vice President of Marketing and Management Services, Landmark Properties. “By retaining key members of established friend groups on campus, we create a subtle yet effective ‘fear of missing out’ effect.” In turn, similar motivations affect adults long after they have earned college degrees.
Mark your calendar, create a conversation
Many renters don’t show up to building events or spend much time in the common areas. They may not have any maintenance issues and may never call the property manager to question a fee. Property managers may have no communication at all with them after they finish moving in, unless the manager reaches out to the resident themselves.
DB Capital’s property management system is set to remind managers to be especially alert for opportunities to connect with residents, starting 90 days before a resident’s lease is set to expire. “Our team will start a behind-the-scenes renewal campaign,” says Degner. “The last thing we want is for the first communication the team has had with a resident in a while to be a renewal offer. By the time someone gives notice, it is really difficult to go backwards.”
If all else fails, property managers can offer residents a gift like a bottle of wine or a $15 gift certificate to a local business. The point is not the dollar value of the gift. Instead, notice that resident has a package and is likely to come in to pick it up—this is where the manager can have a human interaction with the resident and ask basic questions about how their experiences have been at the property, says Degner.
The final offer: Renovation or flexible lease terms can keep residents
Once a property is finally talking with a resident about a possible renewal, a centralized CRM system may help property managers make an attractive offer, says Degner. Items in the history of interactions with the residents may provide clues about what they are most interested in as they choose whether or not to renew. For residents who have already stayed in their apartment for a long time—possibly 10 years or more—Western sometimes offers to make improvements. “If you signed today, we could offer $1,000 off your first month’s rent—or we could replace your carpet. Would you like some laminate flooring instead?” says Khouri. “You know that all we’re doing is maintaining and preserving the asset. But you’re going to see that carpet as a much better deal.”
Companies like Western plan their renovation budgets years in advance. But they have flexibility to make decisions like this to help hold onto residents who might otherwise move.
“Incentives outside of concessions have been helpful in retaining residents in some markets,” says Hatfield. Sometimes that can include offering appliance up-grades. Other offers include flexible lease terms, incentive points earned through resident loyalty programs and even customized concierge-style services.
Property managers can also learn about serious problems at their buildings if they make sure to ask residents for feedback.
Resident surveys can help apartment companies upgrade the amenities—even at older properties. Western recently surveyed the residents at one 1980s apartment community. “How many people are actually utilizing the tennis courts or would you rather have pickleball... or maybe one pickleball court and one tennis court?” asked Khouri. The approximate cost to upgrade the amenities in this particular case cost close to $25,000, but the residents are enjoying it immensely, says Khouri.
Through conversations with residents, DB Capital learned that hotter summers were straining some air conditioning systems in its hottest markets. “When you’re living in Texas and it’s 110 and humid out and your AC is running constantly—upgrading those systems goes a long way with helping control that turnover,” says Degner.
Bendix Anderson is a freelance writer.