Communication is Key for Lease Renewal in 2023
Multifamily trends are showing that resident communication is one of the strongest indicators of how long residents will remain in a property.
In an ever-changing market, apartment owners may find it difficult to keep residents around and encourage renewals over move-outs. In order to maintain high multifamily renewal rates in 2023, operators must constantly innovate and update their properties and practices.
Acquiring lease renewals is a fight against the odds for multifamily operators. As many as 60% of renters move out at the end of their initial lease, according to data from Nurture Boss. Often times, residents have a good reason for doing so, whether it be moving to a new city, upgrading to a larger apartment or house, or wanting different amenities. Nonetheless, landlords should put forth their best effort to retain residents in order to maximize the chance of renewal.
One of the most important strategies is developing a meaningful relationship with the tenant from day one. In fact, you should have already started curating a relationship with the tenant before day one — connecting with potential tenants in a personalized way is a popular strategy for securing a lease signing. However, one of the biggest mistakes landlords make is cutting back on communication once a prospect moves in. The level and manner in which you communicate with a tenant throughout their residency has a strong impact on their decision to renew. Implementing hyper-personalized and consistent communication is one of the most effective strategies to establish meaningful relationships with tenants.
Tony Sousa, vice president of operations at RPM Living, says that “the pandemic seemed to have amplified residents’ expectation of receiving personalized communication on a frequent basis in the manner that they prefer.” He thinks that when it comes to communicating with tenants, operators need to be flexible and consistent. “We’ve found that it’s that consistent, customized messaging that really strengthens the relationship between the residents and onsite teams.”
Multifamily investors are seeing that communication strategies are directly correlated to the length of residency of their tenants. Lindsay Duffy, director of marketing at Western Wealth Communities, explains, “the more you engage with your residents and provide them with the information that pertains uniquely to them, the probability that they will renew their agreement significantly rises.” Additionally, frequent engagement with residents provides insight into the areas they show the most interest in and provides qualitative feedback.
Innovating resident communication methods and personalization not only enhances residents’ satisfaction with their community, but is the strongest incentive for lease renewals. Many operators are using leasing and renewal conversion automation tools to replace antiquated marketing tactics. Even with the most experienced and resourceful management team, responding to every inquiry in a timely fashion is a challenge; automation can facilitate meaningful communication with tenants when the onsite team simply doesn’t have the bandwidth.
Sousa explains the most effective techniques for enhancing communication methods with tenants. “The golden rule is to respond back swiftly and in a way that the residents choose, which is generally the same way they reached out to us.” She says that text messaging is gaining popularity, but email continues to be the most preferred form of communication. “Either way, automation makes it possible for us to contact each and every lead and create a bond with them, not just with onsite associates but the entire community.”
In the post-pandemic rental market, great communication is no longer an added bonus in an apartment complex, but is now regularly expected by tenants. In order to maximize renewal rates and resident satisfaction, operators must adopt modern and personalized communication strategies.