Tenant Retention Should Be the Focus of Professional Property ManagersFiled Under: Property Management Tips, Real Estate Internet Trends
I am sure with today’s economy many people think that it is more difficult to get a tenant to renew their lease. Well this does not seem to be the case for those firms focusing on retention. According to SatisFacts Research in a recent blog posting on a retention survey comparing 2009 to 2008, there is good news for property managers who focus on retention and taking care of tenants. The survey highlights two questions, very likely to renew (1% increase over 2008) and not likely to renew (1.6% decrease over 2008).
However, the real interesting part of the article was the calculation of the cost of a move-out. According to SatisFacts, the cost is $4,500 (due to increased concessions and vacancy loss days). Their top performing clients were able to beat the 2008 index by 7 points. If you do the math, even a small to medium sized portfolio can be greatly impacted by reducing move-outs. For instance, if you have a portfolio of 200 apartment units or single family homes and reduce turnover by 7%, that would equate to 14 * $4,500 which gives a savings of $63,000 per year.
My blog, Does Good Property Management Matter, pointed out that by using low cost technology, a property manager can improve relationships with tenants, thus making them less likely to move-out due to frustration with the property. It seems to me only logical to explore ways to have higher retention, particularly if the cost is reasonable.
There is no escaping the fact that the internet is the easiest and lowest cost way to stay in communication with your tenants. By using a property management website to acquire the tenant and then using a resident portal to communicate with the tenant, you have leveraged the life-cycle costs of getting and keeping tenants. Resident portals allow a tenant to submit property maintenance requests, check out property events, pay rent online, and more.
To investigate web based portals and determine the best approach to use for your operations, refer to my blog, Picking a Property Management Software Solution, or watch a brief overview of DIY’s property management websites.
So is focusing on retention important? Only if you want to improve your NOI.
DIY Real Estate Solutions