With rents rising all over the country, up to an average of $1,739 according to Yardi’s latest report, you may think that a community’s amenities aren’t as important as they have been. Prospective residents are banging down the door, right? But smart apartment managers know that amenities are always important for one big reason: retention.
Retention is the key to a profitable property. The average retention rate is around 60%, according to Zego, meaning 40% of the units are being turned over on a yearly basis. That is a lot of down time, so being able to keep that second number as low as possible is the name of the game.
If 40% turnover is the average that means that half of the properties are doing better than that. So, what are those properties doing that the average and below average properties aren’t?
One simple answer is that they are offering amenities and a sense of community that keeps the tenants happy and engaged. Why is it so important that properties try to avoid turnover as much as they do?
By the Numbers
%
Resident Retention Rate for 2024 up from 56% in 2023.
"Combining what residents truly want and smart management will keep turnover down and increase ROI."
Turnover Expenses
In most cases turnover equals added expenses. Months with no rent, cleaning, painting, shining up the unit to attract a new resident: all these to-dos come with a price tag. Thousands of dollars per unit are spent each time a resident leaves. So why not plan to keep the good ones around longer, and give them what they want?
What Residents Want
There will always be tenants who move for circumstances like a new job or a change in family situation. Aside from looking for cheaper rent, the majority of prospective tenants are looking for a community that enhances their quality of life.
Some of the most requested features and amenities are found in the units (like stainless appliances, smart thermostats, and laundry). While some other popular amenities are enhancing the social aspect of living in a larger property. Some of these amenities include, top-of-the-line gyms, dog parks/pet spas, package management, events, and media rooms.
Tell us how you keep your turnover down.
Consider Your Market
The most in-demand amenities are the ones that renters are looking for in your market. An outdoor pool may be required in Phoenix, but not in the Seattle area where it would only be used in the summer. The free shuttle service mentioned here is a great service for New Yorkers, while more secure bike storage might be more popular in Portland than Spokane.
Know your market and what would make your prospective tenants say, “That feature will really enhance my life.”
Combining what residents truly want and smart management will keep turnover down and increase ROI. Happy residents stick around, which makes for happy property managers.
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