Resident Retention Begins on Move-In Day
We’ve been fortunate in our industry to see the markets begin to improve. However, there is still a lot of uncertainty regarding the economy, so resident retention continues to be “Mission Critical” in order to increase or, at least, protect net operating income (NOI) no matter what occurs in our market. SatisFacts’ research shows that the average cost of turnover is now approximately $3,900 per move-out. To put it in perspective, even if you were able to re-rent that apartment for $50 more per month, it would take 78 months, or 6.5 years, to recoup that initial loss! The good news is that there are basic strategies to put in place to increase retention dramatically, and often they can be implemented beginning on move-in day!
After reviewing the results from the nearly half million units utilizing various SatisFacts survey programs, the data continues to show that maintenance issues at move in have an immediate impact on a new resident’s likelihood to renew. In fact, new residents (those who have moved in within the past 3 months) with an unresolved maintenance issue are one-quarter less likely to renew their lease than longer term residents.
The more compelling data from the SatisFacts Insite™ Move-In Feedback Program shows that unresolved maintenance issues are more common than we would like to believe. Based on 4th quarter 2011 feedback results, when new residents were asked if their appliances and fixtures were working properly at move-in, 20 percent said no. That translates to 1-in-5 new residents having a maintenance issue upon move-in. In addition, of the residents who reported their issues to their leasing office, 53 percent of indicated that those problems have still not been resolved!
Residents begin to think about their renewal decision in those first hours, days, and weeks in their new home. If some of the basics of their home are defective or not functioning, you can bet your bottom dollar they are experiencing “Renter’s Remorse.”
To ensure your new residents don’t encounter any unexpected issues, implement a “Walk Right” final inspection, which requires a maintenance team member to enter the turned apartment and follow the wall to the right, inspecting and testing every outlet, every fixture, every window, every window treatment, every appliance, every door, etc., until he or she ends back at the front door.
Your teams may discover they are correcting the same types of issues time after time for turned apartments, which has the benefit of improving your entire turnover process. While this may add time to the inspection process, the maintenance team will become more efficient and effective at preparing vacated apartments for new residents, and new residents will encounter fewer problems. This reduces the amount of rework the maintenance team will have to return to do in the inevitable service request.
If a problem does slip through the cracks, and the resident lets you know, this issue should be elevated to high importance so that a remarkable recovery can occur. First impressions are lasting, and paying special attention to a resident’s first impression of their new home will have a direct impact on their renewal decision in a very positive way!