March 07, 2012

Tenant Retention Strategies: 3 Solid Strategies for 2012

It’s no surprise that tenant retention has a clear impact on net operating income. Every time a tenant leaves, there are additional costs due to repairs and repainting, advertising and marketing costs, and in some cases, free rent concessions. And, let’s not forget the additional lost revenue caused by the vacancy period.

That’s why tenant retention and lease renewal ranks as one of the most cost-effective development strategies for multifamily property owners and managers – in good times and in bad.

Online you will find all sorts of remedies for reducing tenant retention, everything from raffles for residents, gift cards and offering free WiFi in the laundry area. Of course, tenants will always appreciate friendly employees and amenities, but often the simple things are overlooked.

What Really Causes Tenants to Move Out?

A 2010 SatisFacts study found that 54 percent of residents choose not to renew leases based on controllable reasons. The main reasons that send tenants packing included poor customer service, lack of responsiveness and dissatisfaction with maintenance requests.

Here are three solid strategies to improve your tenant renewals:

1.) Improve Communication

Tenants want to hear from landlords and property managers and know that their concerns are being addressed. It’s important to communicate with tenants throughout their occupancy, and keep them advised on scheduled maintenance or construction issues. Building owners should also highlight upgrades, building amenities and longer-term plans for the building. Help residents to see why they should stay in the building when the lease is up. So, what’s your communication plan for 2012? If you don’t have one, you should.

2.) Prompt Maintenance & Follow-Up

Tenant satisfaction surveys are important tenant retention and planning tools, as they provide insights into the needs of all residents, and property managers can identify projects that would increase the quality of life. They are also an important way of following up on previously completed work orders to gauge how satisfied tenants are with service delivery. Surveys should be conducted on a regular basis. This structured process continues to help push satisfaction, service dedication and perceived value, increasing renewal likelihood.

3.) Enable Self Service

In today’s world of pervasive computer and smartphone access, building owners and managers need to step up their game. More and more tenants would rather turn to the Internet to get answers about issues. In fact, according to the Harvard Business Review, a staggering 57% of inbound calls come from customers who first attempted to resolve their issue on the company’s website.

When residents can take control ad change rent payment methods or get a status update on a maintenance request, it increases satisfaction and a feeling of empowerment.

At its very heart, property management is a service business, and keeping tenants happy is key to renewals. A tenant portal enables residents to help themselves, anytime, anyplace. (Learn more about Property Vista’s tenant portal, PortalVista.)

Renewal gifts, rent discounts and special privileges are all great, but when it comes down to the nitty-gritty, tenants want service.. Concentrate on improving service using through improved communication, prompt maintenance and follow up, and empowering tenants to solve problems on their own and you will also increase retention.

If you have any service strategies, please comment and share them with our community.

 

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Kris Boyce

CEO, Greenwin Inc.

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