Landlord Ed recently shared with me his secret to keeping his costs low and keeping his tenants longer. Having low turnover is the easiest way to keep income coming in the door, and avoid the increased costs of fixing up the apartment between tenants; along with the added cost of vacancy and the costs to secure a new tenant.
Many owners just default to keeping rents lower in order to retain their residents. While keeping prices affordable certainly helps, it is not the only factor when retaining tenants.
A recent survey of renters conducted by RealPage showed that tenants value the below factors which help weight their decision to stay…..or not. Ed uses several of these methods which has helped him keep his highly qualified residents longer.
1. Property management offers modern Tech
Today’s renters expect a seamless, all-in-one tech experience for their entire rental journey. While many industries have embraced tech to transform the customer experience, much of the rental industry has not caught up.
- Up to 97% of renters reported they would be more likely to renew their lease if it were as easy as interacting with Amazon, meaning property management would offer tech that is super easy to use and offers a superior experience.
2. Help make moving less stressful
The moving experience influences how renters view their property managers: 51% of renters rated their property managers lower because of issues moving in.
- Creating a seamless and stress-free moving experience sets the tone for the resident experience. It can help property managers increase resident retention, reduce resident stress, build resident word-of-mouth and reduce the burden for onsite staff.
- Renters are looking for help to make moving less stressful. 97% of renters said they are more likely to consider an apartment whose property manager offers a service to simplify all aspects of moving.
Ed said that to make services easier for his tenants, he integrates charges for Water, Sewer & Trash into the auto rent payment portal, making these utilities a non-issue for tenants to track. He also sets up a building wide Wi-Fi service, where the tenants can move right in, easily set up their account, and be online immediately- instead of waiting for technicians to come out.
3. Moving is expensive – make residents want to stay
Compounding the stressful nature of moving is the finding that renters do it often: 94% of respondents moved in the last two years. This is in line with apartment industry statistics that show turnover is approximately 50% each year.
And as mentioned earlier, moving can be expensive. On average, renters said they spent nearly $6,500 on their last move.
- Because residents do not want to pay this amount- but may be enticed by other apartments offering features their unit does not have – a smart Landlord may offer an upgrade at time of lease renewals.
Ed has his property manager personally contact the resident to ask if they would like any improvements to their space, like new ceiling fans, a flooring refresh or other update that the resident can enjoy. This keeps the tenants happy with a unit that has attractive features, and helps to improve the unit for the long term.
4. Renters Want Loyalty Points for Rent Payments
Almost all- 98% of renters say managers should offer a loyalty program for on time rent payments. They said they like the idea of building an asset from paying rent, and that since they pay a lot of money for rent, they expect a reward for their payments.
- 97% of renters say they would be more likely to renew their lease if a loyalty program was offered.
- Their top preference was to use points as credit towards future rent payments and cost
Not only does this incentivize residents to stay longer, but rewarding on time payments can also help keep payments on track with rent being a top payment priority.
5. Renters Want Convenience and Flexibility in Payments
With residents listing rent as the biggest expense they have each month, it is no surprise that 93% are interested in flexible payments (biweekly, bimonthly, weekly, etc.) rather than in full once a month.
With an automatic portal, offering flexibility is easy for owners like Ed, and provides an incentive that makes the resident life easier. Providing flexible options that allows the resident to choose is a modern convenience that will help to set your units apart.
Bringing It All Together
Average Rents:
These stats clearly show that renters take more into account than just the pricing when deciding to renew or move.
- The national average rent in January was $1,556 per month for a one-bedroom apartment and $1,809 for a two-bedroom.
- In Harrisburg, the average rent for a one-bedroom was $1,200 per month, and a two-bedroom $1,400.
- The rents in our region, Central PA and Northern MD are expected to continue an increase as limited supply keeps rent costs on the increase.
As Construction Slows, Vacancy Rates Decline
Apartment construction hit a 40-year high in 2024, with around 677,000 new units added. However, that number is expected to drop to about 346,000 in 2025. With fewer new apartments available, vacancy rates may shrink.
As a Landlord, keep in mind that the market is pushing prices in your favor. However, to retain tenants, a smart landlord can offer something other than just lower rent prices. Utilize these strategies to keep engagement with your residents and retain them longer than the average 2 years.
Conclusion
As an client focused Landlord, keeping your focus on providing the best tenant experience will result in a bottom line that grows along with your happy residents and community engagement.
Many of the Landlords we work with appreciate the focus we have on providing the best client experience- along with a healthy bottom line. If you are looking to grow your investments contact us to discuss your strategy.
Sources
https://www.apartments.com/blog/apartments.com-national-rent-trends-report
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