President and GM at Zegoa proptech company modernizing resident experience management to drive retention, productivity and NOI.
The past few years have been a roller coaster experience for multi-family real estate, with occupancy rates, monthly rents and aggregate demand fluctuating like never before. In terms of where we are now, rents have more than increased 20% year after year. To put that in perspective, rental growth was just 3.5% between 2015 and 2019. At the same time, the market is experiencing unprecedented demand as tenants return to major metros, with the direct result that vacancy rates have fallen to 2.7%— a figure not seen in decades.
While short-term market forecasts show good prospects, the focus on resident satisfaction and retention remains critical to success. With this in mind, let’s look at two main groups that are critical to the health and overall success of any community: residents (both current and potential) and staff.
Residents, present and future
With rising rents come higher expectations from residents in terms of what their rental community can offer. Of 82% of renters who say they plan to move next year, now is the time to focus on meeting — and even exceeding — expectations, not ignoring them. Owners and operators who focus on resident satisfaction at the best of times will maintain their high occupancy rates. On the other hand, when we reach the inevitable slowdown in the market, unhappy residents will probably have no qualms about moving away from an unsatisfactory community.
So what can be done? To begin with, communication and responsiveness of management has been mentioned as one of the most important top three reasons why residents choose to renew their lease or leave a community. Residents place high demands on communication with their property managers: when contacting teams on site, they want an easy way to get in touch and get a quick response. Emphasizing communication is a cost-effective and effective solution for building and maintaining resident satisfaction and trust.
A focus on resident satisfaction will also make for an easier time on the road when looking for new residents. When residents’ expectations are met or exceeded, they are more likely to spread positive messages about their apartment community through word of mouth or online reviews.
At a time when key touchpoints are moving into the digital space, this is critical to maintaining a healthy pipeline. Companies with a better online reputation are likely to higher demand of prospects of living in that community. Even in times of high demand, revenue costs, which remain high around the $4,000 per unit – still loom. It is in the interests of owners and operators to maximize satisfaction and minimize vacancy, however possible.
Employees are shining stars
It’s been said before, and it’s always worth saying again: employees are invaluable to any business. Unfortunately, The Great Resignation takes its toll on the rental industry when it comes to retaining talent. Typically, on-site staff turnover is around 30% to 50%, but in the current labor market this is estimated at as high as 70%.
In an environment where employees are burned out or lack a decent workforce in terms of real estate personnel, both the operations and the residents’ experience suffer. J Turner Research notes that the more often a community experiences on-site employee turnover, the lower the satisfaction score for the property in question. The importance of supporting employees and preparing them for success is obvious.
Real estate technology is one way to consider, as it can help the real estate workforce scale efficiently and provide better service, while maximizing job satisfaction. Working in an apartment community where residents need help at many (if not all) times of the day can be demanding, community managers have said 30% (pdf download) their workload is unmanageable.
Implementing self-service options such as digital rental payment options, reservation and maintenance request platforms, parcel lockers, and self-guided property tours can help owners and operators free up bandwidth so staff can properly meet residents’ personal needs while continuing to cherish it always. important element of communication. In addition, when employees do not have to perform the same menial tasks over and over, it helps prevent burnout, which directly correlated to dissatisfaction and turnover.
Another way to reduce employee turnover is to spend more time with them, both during the onboarding process and during their time at a property. Among community managers, 36% said they didn’t have enough time to train before being thrown headfirst into their responsibilities. In a world that’s always go-go-go, it’s critical to slow things down when a new team member joins and make sure they’re fully prepared to deliver what’s expected of them.
Once employees are well-adjusted to their new role, regular check-ins can help further minimize the risk of burnout and attrition. Schedule time with each employee, whether weekly, biweekly or monthly, for an honest, open conversation about how things are generally going and where the workload is ahead of them. Invite them to bring any concerns or questions to the table without fear. Not only does this encourage employees to express their frustrations, but it also allows them to reflect on the positive aspects of being part of the real estate team and any successes they have had.
While a red-hot market is always desirable for its positive impact on bottom line, it can cloud vision and cause us to lose sight of the future and the bigger picture. Property owners and operators who take this time to slow down and examine their operations and management will ultimately also be better off if the market slows down.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.