Most Apartments Are Falling Short of Their Retention Goals. Here’s Why
A new report from Zego shows that 94% of management companies have a resident retention goal, a number that recognizes the financial necessity of retaining residents (particularly during a pandemic). And most of those surveyed are shooting for at least 50% retention or higher—a goal Zego says is “healthy and realistic,”—while also accounting for so-called “non-controllable instances” that preclude renewal like job location change.
But survey data shows that most of these well-intentioned companies fall far short of their retention goals, especially those who manage less than 1,000 units.
“This suggests that not enough resources are being devoted to resident satisfaction,” the report notes. “Companies are likely putting more emphasis on what, traditionally, has been a top business priority: acquiring new residents. And while that should still remain an important focus, it’s not enough to stay competitive.”
Instead, companies need to focus on creating “exceptional resident experiences” to keep occupancy rates in check, Zego experts say. A January report by Package Concierge found that half of renters have changed how they prioritize amenities during the pandemic, with 91% of those surveyed saying amenities will play a factor in their next apartment search.
Among the top amenities? Package management systems, smart home devices, gyms and recreational facilities, outdoor kitchens and dining facilities, and pet services.
At its worst, US apartment resident retention was 51.1% in December 2020. Class C projects, which are in chronically short supply across the US, typically have the best retention rates: in Q1, Class C resident retention clocked in at 61.9%. Conversely, Class A apartments usually post the most churn; resident retention when Class A leases expired during the first quarter was limited to 47.6%, according to RealPage Chief Economist Greg Willett.
Source: globest.com
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