![]() ![]() It’s wise to examine the key touchpoints across the resident lifecycle. And don’t forget all the other small touchpoints in between. It can encompass how residents retrieve their packages, to the way you manage maintenance requests. By focusing on improving the resident experience operators can make a material impact on reducing unit turnover.įor example, “seeking better apartment management” is a broad bucket. ![]() The reasons include seeking better apartment management, lower rent, or better apartment features. By a factor of nearly 2:1, residents leave a community for reasons that are preventable. However, these instances are the minority. These things are unavoidable and a healthy reason for churn. For instance, sometimes renters are relocating to a new city, or have a change in family status. There will always be instances of unit turnover that your company cannot prevent. ![]() Reasons to not renew lease Our takeaway: Unit turnover rates are driven by the resident experience This gives us a better understanding of why residents leave a community. Then, we categorized the responses: controllable by management and not controllable by management. We started by looking at the reasons residents report moving to a different community. In fact, NMHC’s Apartment Resident Preferences Report cites this as the second most common reason residents move away from their community (behind seeking lower rent).īecause it is so costly to replace residents, we wanted to understand what causes churn. Or their life circumstances have changed.īut more often than not, the decision to leave stems from unhappiness with the community management. Maybe they got a new job that’s farther away. Sometimes residents are happy with their community but can’t stay when it’s time to renew. #2 The majority of unit turnover is preventable That will minimize unit turnover so retention goals are easier to hit. With turnover costs being what they are, management companies need to focus on creating exceptional resident experiences. Companies are likely putting more emphasis on what, traditionally, has been a top business priority: acquiring new residents.Īnd while that should still remain an important focus, it’s not enough to stay competitive. This suggests that not enough resources are being devoted to resident satisfaction. Particularly, those who manage fewer than 1,000 units. But survey data shows that most companies fall short of their goal. It also accounts for non-controllable instances of unit turnover (job location change, life circumstances, etc). Most companies (77 percent) are aiming for 55 percent retention or higher. While some churn is to be expected, the gap between the top and bottom quartile begs the question, what are the top performers doing differently? Our takeaway: property managers should look closer at their resident experience There is nearly a 20% difference in retention rates between the top quartile and the bottom quartile. On the flip side, the bottom third and fourth quartile are falling below the industry average retention rate of 58%. The top performing quartile of property management companies is achieving a 65% resident retention rate. Current resident retention rates for management companies in 2021 Thirty-one percent aim for 61 percent retention or higher. The majority of management companies aim to retain at least 50 percent of their residents year-over-year. But we were also curious to hear what they are aiming for with resident retention. It’s great so many companies are setting goals to minimize unit turnover. So how many companies have goals around resident retention? As it turns out, almost all.ĭoes your company have a resident retention goal? #1 Industry average resident retention rate is 58% but top performers are achieving 65%Ĭlearly, unit turnover is harmful to your business. With the help of Strategy Analytics, nearly 700 apartment operators gave us feedback on the resident experience in their communities. So, what are companies doing to combat unit turnover? Our first-ever State of the Resident Experience Report provides some insight. ![]() Even slight improvements in resident retention can boost your bottom line. If you consistently have residents who move because they are underwhelmed with their community, the costs will eat away at your NOI. Did you know the cost to replace just ONE resident that moves out is nearly $4,000? This is hardly chump change! Because losing residents has major financial impacts. Naturally, you may wonder how to make renters feel good about their homes so you can minimize unit turnover. Download The State of Resident Experience Management Report to get fresh insights about improving the resident experience.ĭownload now Unit turnover is costly for multifamily property managers ![]()
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