Retail brands often use the term “customer retention” when describing their marketing, branding, and sales efforts. Many of the same customer retention strategies can also be applied to the multifamily housing market. If you’re looking to boost renter retention, consider these critical resident loyalty drivers.
1. Gather (and act on) resident feedback. A big folly among owners and property managers is when they assume they know the ins and outs of each unit and property—but unless you’ve lived in that unit, you can’t have a firm grasp of the little things that could be improved to make residents happy. Every so often, it’s essential to gather (and act on) resident feedback.
Here’s a simple example. A resident had been living in a unit for two years. The way the unit was laid out, you’d open the front door to the apartment and walk into the living room. The kitchen was just beyond the living room in this open floor plan concept. The only light switch for the living room was between the living room and this kitchen.
This meant that every time the tenant left the unit, they’d have to shut the light off and walk through the dark before getting to the foyer by the front door. It was something the resident had grown used to, but it was also something that could be easily fixed with the addition of a new switch.
This issue was not necessarily one worth flagging for the management company—unless the management company had explicitly asked for feedback.
Moreover, thankfully, the management company probed for input before the lease renewal period. The tenant reported this as an improvement that would eliminate a significant annoyance. She was happy the landlord acted on this feedback, and ultimately, she signed a new lease the following year. Residents generally appreciate their voices being heard.
2. Modernize your systems.Today’s renters are more tech-savvy than ever. They increasingly expect to be able to pay rent online. They want to communicate with their landlord or property manager via text, email, or even social media. They value the convenience of tech-enabled smart home devices, from learning thermostats like Nest to keyless entry locks. Consider integrating more technology into both your business practice and individual units. These relatively small investments show residents that you care about them, and the property, which will increase their likelihood of staying another year.
3. Make strategic property upgrades.Tens of thousands of new apartment units have come online in recent years, creating more competition for landlords than ever. Most of the new apartments are at the top end of the price spectrum so that some owners can compete on lower prices alone. However, it can be tough to compete with the amenities of these new apartment buildings offer. Pools, doggie daycares, bicycle repair stations, BBQ pits – you name it, new apartment buildings seem to offer it all.
Reposition your property by making strategic upgrades. Maybe it’s time to invest in new landscaping or an outdoor patio area for residents to gather. Alternatively, perhaps you can transform an unused space into a home for new storage lockers. Little investments, like garden beds, can amp up the appeal of a property without breaking the bank.
The key here is to make investments that appeal to residents without drastically increasing rents, which could negate your other renter retention efforts. Not sure where to invest? See the point above around surveying residents! This is a great way to enhance loyalty amongst your existing renters.
4. Take cues from loyalty programs offered in other industries. The retail, hospitality, and airline industries have some of the most forward-thinking loyalty programs—and multifamily property owners should take note! For example, if you’re a longtime customer with American Airlines, your phone calls are answered faster. You can redeem your miles to be used even during blackout dates. You have access to club lounges at international airports. These are a few of the perks that keep American Airlines customers loyal, despite growing competition from low-cost carriers.
Apartment owners can follow these cues. For instance, when it’s time for residents to renew their leases, offer a menu of options that incentivize them to stay. For example, offer to pay for a cleaning service to do a deep clean of their unit upon renewal. Maybe offer to have the unit repainted if the resident has been there for more than a few years and is willing to resign for another. There are creative approaches that can result in highly loyal residents, despite the increased competition from new construction.
At first glance, a landlord might shy away from investing in these vital loyalty drivers. Each carries some level of cost. However, resident turnover can bring even higher costs. It’s a lot more cost-effective to keep a resident in place and pay for a deep clean vs. having that $1,400 per month unit sit vacant for a month while you try to re-lease it! Turnover costs can be steep, which is why multifamily owners should be laser-focused on creating and retaining highly loyal residents year after year.