How to “Close the Back Door” and Retain Good Tenants
By Elaine M. Simpson, author of Close the Back Door: Solutions for Retaining Residents in Multifamily Communities
“Close the Back Door!” – You probably heard this shouted to you by your parents a lot as a child, I know I did. Usually warning you so that you didn’t let the flies and bugs into your house and sometimes as a reminder so that you didn’t let the heat or air conditioning escape. Among property management professionals, ‘Close the Back Door’ is a common term referencing residents moving out of your community; the idea that your residents may be trickling out of your community while your attention is focused elsewhere, like on attracting new residents.
Resident relations and retention are vital to a successful rental housing business. Long-term residents can be the dream of every property management staff and owners because you don’t incur the cost of replacing current residents.
Did you know, it costs 5 to 6 times more to replace a resident than to retain just one? Think about it, once you’ve factored in apartment turnover expenses, advertising, and the time work it takes to bring a new resident in, the math speaks for itself, and better retention rates save you in the long run.
It’s a tough job, balancing your attention between keeping current community members feeling well-cared for so they stay and showing potential residents enough love to entice them to choose you and your community over your competition. Great resident relations also build resident loyalty and a sense of community, all being incredibly positive for your bottom line. Another unsung virtue of resident retention is resident referrals!
The following are a few important tips on this subject of resident retention that will help you be successful in retaining residents therefore increasing your NOI:
Be more selective
Assess your current resident selection plan and consider increasing your minimum income and credit requirements. Residents who qualify with a higher minimum income requirement and credit score are less likely to struggle each month to meet their rental obligation. Residents who don’t struggle with finances are generally happier residents. That makes your job easier so why not accept the best of the best? It may create a smaller pool of potential residents to choose from, but the ones chosen are more likely to fulfill their lease terms, renew, and reduce delinquency.
Who wants to be the “evil” landlord that is hard to reach and who barely seems to have time to devote to their residents? The friendlier and more approachable you are as a staff member, the easier it will be to build a strong rapport and lasting relationship with your residents. Note, we are suggesting you be friendly, not friends.
Proactively contact residents to see if they have any concerns and what maintenance needs to be done in their home. Being proactive about maintenance and anticipating needs before-hand demonstrates the value you bring to their lives. Checking on them makes them feel cared for, increases their loyalty, and brings you new referral business.
Keep your integrity intact
Don’t make things up to satisfy a resident “in the moment”. It is okay to say that you must look up a policy or make a phone call before you get back to them with an answer. Not only does this show you are willing to do the work in finding the correct answer, but it also gives you a great opportunity for follow-up with the prospect or resident. Come back with the right answer and they will be more likely to respect you for it. Be honest and build trust.
Reward your residents with a lower rent increase if they renew early instead of waiting. The average apartment renter will begin their search for their next home approximately 1-2 months prior to renewal, this means you’ll want to catch their attention at least 3-4 months prior to renewal. Use progressive deadlines and tiered renewal rates to incentivize residents to renew early and not look elsewhere. Treat the renewal like an anniversary and include, as a gift, improvements or upgrades to the resident’s apartment.
Be organized and professional
Ensure all information and documents are kept in order and readily available. During the early stages of meeting new residents and touring prospective residents, your organizational and professional skills will be under scrutiny. You want to make sure the first impression you provide is a good one.
Create a resident retention plan
By establishing a successful resident retention plan (as a partner to your marketing plan), you’ll set the stage for you, your team, and your community to be on more stable ground for years to come! Communicate with residents every month, from before the move-in through the end of their lease instead of waiting until renewal time. Create a plan that provides many opportunities to connect with your residents and follow it. For more guidance on this subject, see our seven-step resident retention plan in our newest book!
If something stops working, it can lead to serious stress for a resident. Be responsive to their needs and take care of issues as they arise as soon as you can to ensure that you give them another good reason to renew their lease.
Many professionals in our industry never check on residents to see if they are happy or ask about their likes and dislikes. Why not survey your residents? Keep your surveys short and focused on one topic. Their answers may surprise you but will assist you in finding ways of keeping them happy. Happy residents turn into long term residents.
You won’t always be able to immediately meet residents’ needs. A little flexibility will help to make those times a bit easier. Flexibility will allow you to do your best to meet in the middle. Maybe you can’t give them exactly what they want but might come up with a way to supply what they need.
Be a problem solver
If your residents are coming to you with a problem, be the one who provides a solution or works with them to come up with an alternative that is acceptable for both of you. Think creatively to make up a plan that satisfies everyone. If you are willing to work with your residents to get them what they need, they will be more willing to come back to you the next time they need something. Read books, attend trainings, and take online courses to learn new things so that you’ll be ready to deal with whatever comes your way.
Looking for more about resident retention? Check out Elaine M. Simpson’s newest book, Close the Back Door: Solutions for Retaining Residents in Multifamily Communities or visit Occupancy Solutions, LLC.
About the Author
Ms. Simpson has passionately been making her mark in the housing industry for over 30 years! Starting on-site as a leasing agent, she worked her way up the corporate ladder by advancing to become an assistant manager, site manager, executive director and finally a senior regional manager with communities in several states and portfolios containing more than 1,400 units. Ms. Simpson has extensive experience in Section 8, Section 236, and Low-Income Housing Tax Credit programs, senior communities, as well as market-rate and luxury apartment communities. As the founder and president of Occupancy Solutions, LCC, Elaine has helped countless professionals with all their leadership, operational, marketing, maintenance, human resources, housing compliance, leasing consulting, and training needs.