Online Renewals Reduce Turnover and Increase Asking Rents
It is said that the best customer is the one you already have. The same goes for multifamily: the best renter is the one you already have.
At industry events this year, one of the hottest topics of discussion has been resident retention. This year’s NMHC Annual Meeting held a standing room only session on the topic. And see what happens when you google “resident retention.”
As the rental market continues to improve and the housing market continues its slow recovery, it seems more important these days to keep the residents you have. One of the technologies getting some impressive results is offering your residents the ability to renew their leases online through a resident portal.
In a news release discussing the benefits of online renewals, leading multifamily real estate investment trust UDR was cited for the success it has seen with online renewals.
“Since we began offering online renewals [in July 2010], more than 80 percent of our lease renewals have been completed online, a phenomenal acceptance rate in such a short period of time,” said Tom Toomey president and chief executive officer of UDR. “At properties with a high percentage of leases renewed online, turnover has been 2 percent lower and asking rents have increased by 3 percent with 90-95 percent of residents accepting the initial rent increase. Residents can make faster buying decisions and more are choosing to stay with our communities.”
By focusing on resident retention, property management companies can greatly decrease expenses associated with turnover. Satisfacts Research estimates the average cost per move-out is approximately $4,100, which includes average vacancy loss days, concessions, marketing, leasing staff time, and apartment repairs required to re-lease the unit among other turnover expenses.
Online renewals also give property managers the option to offer time-sensitive lease renewal incentives through the resident portal to secure renewals more quickly and stabilize occupancy.
With the competition for renters getting more urgent, now is the time to focus on keeping your current residents where they belong, and online renewals looks like a compelling part of any resident retention strategy.
Are you using online renewals as part of your resident retention strategy? What kind of results are you seeing? Please share them in the comments below.