Resident retention is a crucial aspect of property management. It is essential for property managers to understand the resident life cycle and how it impacts the performance of the property.
The resident life cycle in property management can be divided into four stages: pre-move-in, move-in, occupancy, and move-out.
During the pre-move-in stage, property managers are responsible for marketing the property, answering questions, showing the property, and screening potential residents.
The move-in stage involves conducting move-in inspections, collecting move-in fees and deposits, and handing over the keys.
During the occupancy stage, property managers are responsible for managing the day-to-day operations of the property, responding to maintenance requests, collecting rent, and communicating with residents.
Lastly, during the move-out stage, property managers are responsible for conducting move-out inspections, assessing damages, and returning security deposits.
Resident retention is the act of retaining current residents and minimizing resident turnover. Resident turnover is costly and can negatively impact the performance of the property. Here are some reasons why resident retention is essential:
Cost Savings: Acquiring new residents is expensive. According to the National Apartment Association, it costs five times more to acquire a new resident than to retain an existing one. By retaining residents, property managers can save money on marketing, leasing, and turnover expenses.
Stable Cash Flow: Resident turnover can lead to a decrease in cash flow. Vacant units do not generate income, and the cost of turning over a unit can be significant. By retaining residents, property managers can maintain a stable cash flow and reduce the risk of financial instability.
Positive Reputation: Retained residents are more likely to refer friends and family to the property. Positive word-of-mouth can lead to an increase in occupancy rates and a positive reputation in the community.
Resident retention has a significant impact on the performance of the property. Retaining residents can lead to increased occupancy rates, reduced turnover costs, and an improved net operating income (NOI). According to a study by the National Apartment Association, properties with resident retention rates above 50% had occupancy rates 5% higher than those with retention rates below 50%.
The cost of turnover is between $2,500 and $3,500 per unit, according to a study by the Multifamily Insiders. By retaining residents, property managers can avoid these costs. Lastly, properties with a resident retention rate of 75% or higher had an average NOI increase of 3.3%, according to a study by the National Apartment Association.
In conclusion, by understanding the resident life cycle and the importance of resident retention, property managers can improve the performance of the property. Retaining residents can lead to cost savings, stable cash flow, a positive reputation, increased occupancy rates, reduced turnover costs, and an improved net operating income.
Property managers can retain residents by providing excellent customer service, responding to maintenance requests promptly, and addressing resident concerns.
By investing in resident retention, property managers can create a positive living experience for residents and a profitable property for themselves.