Tenant Experience Strategy for Landlords
It’s a basic business fact in the landlord industry that turnover hurts profitability. When tenants don’t renew their leases, it launches a negative process that increases workload, cleaning and repair costs, and vacancy listing advertising expenses.
Is there a problem with the tenant experience today that causes higher turnover? What is causing your churn rates?
Zego’s new tenant experience survey found the average retention rate is 58% and turnover costs are approximately $4,000 per unit. If you manage 50 to 1000 properties, then a tenant experience strategy can pay dividends. It can help you raise rent prices and grow revenues.
A New Focus on the Tenant Experience
Surprisingly there are few reports available on residential tenant satisfaction, which perhaps shows a lack of concern for the tenant experience. It’s not viewed as a profit center. On top of that, landlords and property managers often look for tips on tenant retention rather than on improving tenant satisfaction. It begins with your rental listing and move in through the tenancy to continuous lease renewals.
Our focus today is on a topic that is getting more traction: Tenant Experience Strategy. Finding ways and achieving tenant satisfaction isn’t easy, and sometimes has to be rolled out over time. That’s why strategy comes into play.
The Zego report (free download) reveals a few noteworthy tenant experience touchpoints:
- the move-in process
- pet, vehicle, and visitor registration
- online rent & utility payment
- easy, safe unit access
- direct two-way resident/landlord communication
- building amenity reservations
- exclusive local community offerings (i.e. discounts to local shops/services)
- social and holiday calendar coordination, event planning, and decoration
- easy online lease renewal
- move-out process
What’s Causing Churn?
Zego cited lower prices, affordability, better neighborhoods, better living spaces, better features and amenities, newer more modern units, personal changes, and moving to a new city as key drivers of churn.
You could argue that none of these are controllable. The report ironically indicates that social community is not a factor in lease termination. In all fairness, it is an important part of their lifestyle and Zego focuses on the community benefit.
However, the factors they cite suggest that “It is what it is.” If you believe that, then you may want to revamp your tenant recruitment strategy and improve the kind of tenant you’re attracting. Demanding, discontented, digital hungry, upwardly mobile renters for instance might mean higher churn rates in some older buildings.
Expert matching of your rental’s benefits to the most suitable renters might be your number one strategy.
Improving your tenant experience may hinge on 3 things:
- knowing specifically what modern renters actually want
- what can you improve your amenities and service
- what is the weakness of competitor’s rentals you can leverage (in your communications)
If you resolve all 3 of these, then you’re focusing on a value proposition that will keep tenants leased and willing to pay higher rent. Higher rent is a reward for happier tenants.
What do Renters Want?
We’ve covered the challenge of what renters want and creating an ideal renter experience previously. Certainly Covid has colored the needs and expectations of renters of recent. And as Covid 19 recedes, renter’s preferences will likely revert to 2019’s priorities.
Are social engagement needs a key? While tenants want more than knowing neighbors and attending barbecues, having friends in the same building or in the neighborhood is a positive. The human connection is a powerful anchor. Renters will pay more to live near their friends — the benefits personal relevance, security, and social outings.
Renter demographics in many countries have changed. They’re younger and social — Gen Z’s and Millennials and they have an emphasis on digital connectivity and being social via digital devices. This can’t be ignored because in many cases, their identity and sense of personal power comes from the digital technology they’ve grown up with. They rely on it to manage their lives and socialize. It connects them socially.
Your mobile tenant app may help a lot. Conclusion: People and technology are key drivers of the tenant experience.
Your Property Management Platform Can Help
When you can’t implement any physical improvements in your buildings/rental houses, you may have to look to your property management software or other digital services. Of course, that will ease you into the modern world of next generation landlord solutions such as ManageCasa. This will be a business changing and profit-boosting performance improvement.
Young renters love the convenience and power of digital tenant solutions. From their viewpoint it’s a tenant experience platform and they do appreciate what they can access.
It’s All About the Lifestyle
Home is important to everyone. Financially enabled renters choose for lifestyle reasons, and the experience you provide is central to their comfort and lease decisions. Let’s take a deeper look at your community and renter experience so you can create your own innovative upgrades to win more tenant loyalty.
Here’s the experience loyal tenants want:
- a friction free living experience (online rent payment, online lease reviewing, online bookings, direct communication with landlord online, tenant portals)
- positive reviews of your rentals to let them rationalize the decision to rent from you and continue renting (validation)
- digital amenities that help them feel modern and up to trends
- safety, security, and shared experience with other caring, responsible, and pleasant tenants
- social experiences to build acquaintance and ease alienation and feelings of being strangers
- chances to share, socialize, and express friendship
- on site events to ease boredom and create focus (psychological benefits)
- opportunity to entertain family and friends (they don’t typically visit friends in apartment buildings)
- spaces to exercise, relax, participate (gardens, park settings, swimming pools)
- spaces for kids to play safely and socialize
If the tenant community is a key element of their living situation, then finding ways to create community is wise. Create amenities or events to bring tenants together to make them feel at home, social, connected and “have a life.” Open your mind to creative ideas for tenant social or party events.
Find out more about the ideal tenant experience strategy and tenant experience apps, which can raise your tenant retention rates.
Learn how to purchase property management software.
Additional Reading: Learn, Review, Rate Trial Software | Landlord App | Property Management Apps | Rental Market Outlook Rental Apartment Redesign | Renovate a House | Renovate Apartment | Rental House and Apartment Painting | Tenant Experience Strategy | Apartment Vacancy Listings | Apartment for Rent | Reduce Tenant Churn or Turnover | Tenant Retention Strategy | Tenant Selction Tips | How to Find a Tenant | Credit Report Checks for Tenants | Background Checks