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When reviewing the comments made by
residents in a recent SatisFacts Resident SatisFaction Telesurvey, the following
comments really caught our attention. We’ve
written before that gift wrapped rolls of toilet paper are not the key to
resident retention – it’s focusing on the basics such as a courteous and
capable staff, working laundry rooms, the ability to find parking AND making
sure that residents are satisfied with their apartment home. When residents do not respond “Very
Likely” when asked the question “When your lease expires, how likely are you
are to renew it?” we automatically probe, asking why they are not very likely.
In studying the responses, we tend to find some very interesting
comments. We do see nearly 10% of the residents who
state that they are not very likely to renew cite the reason as the infamous
“rent increase”. Upon further
review, however, quite often there is much more to this response than just a $35
rent increase. As the following
examples show, stating that the rent increase was the cause for concerns about
renewing is not always the real issue. We
have found that in some cases the real issue is that longer-term residents see
that they are paying the same rent for their older apartment home – as new
residents who are moving into apartments that have been updated to some degree
(from simply repainted, shampooed or new carpeting up to varying degrees of
renovation). In these cases we have found that the issue
is not the rent increase – the issue is the resident’s PERCEPTION that they
are NOT GETTING as good a VALUE as new residents, and that they are NOT BEING
REWARDED for their longevity at the community. Cases like the two that follow (both from
the same community) are food for thought. First,
when a resident gives notice and cites the rent increase, we need to talk to
them and attempt to probe deeper. Is
the rent now out of their budget? Or,
is there another issue hiding in the background? Is the real issue outstanding/unresolved maintenance work,
problems with their neighbor, OR a perceived value issue?
Second, the question for the latter case is what can you do to resolve
the issue (s) and “save” the resident. When move-outs cost between $2,000-$2,500
(turnover hard and soft costs, vacancy loss, concessions/specials, advertising,
etc.) and a resident simply feels their apartment is not as nice and fresh as
the ones new residents are moving into, wouldn’t you be willing to spend
several hundred dollars to shampoo their carpet and/or paint their apartment in
return for a one year lease renewal? Also, the proceeding discussion and the
following examples are strong ammunition for considering lease renewal incentive
menus. With such a program, in
return for renewing their lease residents get to select from a variety of
in-unit improvements (from shampooing carpets to painting and up).
The value of improvements they are offered increases the longer they have
been a resident. Keep in mind, if they move out you’re going to have to
spend much more – so why not spend less and increase resident satisfaction and
renewals? All of this said, take a look at what these
two residents had to say. What
would you do if these were residents at one of your communities? “The new people that are coming in should
have to pay a higher rent because they're almost getting a brand new apartment.
Their apartment has been painted, remodeled and totally done over.
Don’t they see that those people only stay six months to a year and
that they're not getting much profit out of them?
People like me who've been here for 14 years have given them a lot more
money than the newer people will ever give them and the things in my apartment
are a lot older. I have the same
cabinets that were here when I moved in. My
apartment hasn't been painted in 14 years. The carpet that I have is my carpet;
I paid for it, it's mine. I live
here by myself and I keep this place immaculate and if I'm not getting all of
the remodeling, painting and replacements done. I shouldn't have to pay such a huge rent increase.
Thirty-five dollars a month for twelve months is $420 a year and I've
been paying it for three years - so I've already paid $1,260 worth of rent
increases. I shouldn't get another
one in February. I've paid my
share.” “There's been a big turnover recently.
People who lived here for a very long time have moved.
Why? When someone moves out
of an apartment they renovate, put in dishwashers and update everything so the
people moving in are paying for what they get.
But the people who have lived here for a while have had the same
apartment with no upgrades or renovations and still have to pay a $35 rent
increase every year. That’s not
right.” These comments, and the results from the
satisfaction surveys, are extremely valuable as they show that the keys to
resident retention and renewals are more under the property’s control than one
would expect – and can be often resolved.
Sharing the results of telesurveys such as ours with your staff and
developing sound follow up action plans can have a dramatic impact on the bottom
line by improving satisfaction, reducing resistance to rent increases,
minimizing unnecessary turnover and increasing renewals. January 2002 Issue |
