One of the easiest ways to keep NOI pointing north is to retain your existing residents and increase lease renewal. We understand that markets fluctuate, and sometimes retention takes a back seat to upselling units, but a change of tenants always comes with costs. Plus, if the Resident Experience is there and your tenants enjoy being a part of your community, more often than not, you’ll be able to retain them even with a rent increase. Retention also ensures revenue continues uninterrupted and, let’s face it, who doesn’t want that?
Below, we’ll explain some of the best tips to increase lease renewal so that you can retain tenants.
Why lease renewals matter
First though, it’s worth highlighting exactly why lease renewals are so important.
The most obvious reason to keep hold of a resident is that it could potentially mean months of lost revenue in rent. The market is highly volatile, and just because you have a wait list of prospects today, doesn’t mean that’ll always be the case. Also, the move out process takes time and can involve a lot of additional work preparing the space for a new resident. Turning a unit incurs additional costs, many of which are regulated by law and simply impossible to get out off.
As well as the costs and lost revenue, converting lease renewals saves time. Finding a new resident involves taking time to advertise, screen, and process applicants.
How to convert lease renewals
Converting a lease renewal should not be considered a last-minute thing. The renewal process doesn’t start 30 days before the lease is up. Instead, property managers should pro-actively keep their residents engaged throughout their lease period so they will actively want to renew and even opt to extend their existing lease ahead of time.
Seasoned property managers know that good tenants are a valuable commodity. Retaining them should be a priority. To help keep reliable rent-paying residents living within your property, check out these 6 tips that will increase conversion on lease renewals.
1. Make it easy to renew
A resident is much more likely to sign if the lease renewal process is fast and uncomplicated.
One of the best ways to achieve this is to make the most of modern technology. Younger generations expect the lease renewal process to be fully digital, preferably using a smartphone if possible. Moving towards digital app solutions has proven massively successful for other industries, with Uber, Amazon, and Netflix setting the convenience standard that people have come to expect.
Property managers should make use of digital PDFs rather than paper documents. This is not only more beneficial in terms of carbon footprint but also far more convenient for tenants who can read the lease terms in a familiar format, using search features, and speeding up the process dramatically.
2. Use surveys to gauge resident sentiment
One of the features Flamingo customers love is our Pulse Surveys. What it does is it sends monthly surveys to residents that they can answer in less than 1 minute. We call them Renewal Intent surveys, and they have only 2 questions:
- How likely are you to renew your lease?
- Why?
Residents can pick between 1 and 10 depending on how confident they are they’ll renew their lease.
The Renewal Intent Survey does wonders for site teams. A few of the scenarios we’ve encountered are:
- Residents who consistently answered that they’re likely to renew, and a couple of months prior to renewal, their answer suddenly and drastically changes. That usually means something happens, and you as the Property Manager can catch that in time to hopefully reverse the situation.
- Residents who are 100% not renewing, and they know it, sometimes up to a year in advance. This gives you a great headstart to plan and turn that unit as quickly and efficiently as possible.
Below is an example from a resident who said he even though he loved the community, he wasn’t going to renew due to him needing more space. This was caught by the Property Manager who got in touch with this resident to let him know of his transfer options for bigger and more spacious units!
In conclusion, these surveys offer residents a way to voice concerns directly with property managers, as well as let them know what’s working. Guesswork is taken out of the equation when determining the likelihood of continued revenue.
3. Use your rewards program to incentivize early renewals
Another great way to convert renewals is with a fully integrated rewards system. A reward program’s goal is to incentivize certain actions or behaviors from residents, so it makes perfect sense to rely on yours to help boost renewals.
Consider offering residents custom perks for early renewals; these could be gift cards, credits on your concierge system, free amenities access, and more. In our experience, Rewards Systems that are fully integrated into your resident app are more successful. With Flamingo’s Resident Engagement App, for example; residents get rewards from small things like attending events, uploading event pictures, or raising maintenance tickets through the app, to bigger, more valuable tasks like renewing early and completing their onboarding checklist.
The more connected it is, the better. Residents don’t want to lose a “loyalty” program that makes a part of their daily lives. This can play a big role when deciding whether to renew or not.
4. Automate the process as much as possible
Lease renewal should not catch residents or staff off-guard.
Residents appreciate knowing exactly how long is left on their lease and that property managers are on top of the admin side of things. This gives residents peace of mind, knowing they don’t have to chase property managers up come the time to renew a lease. With multifamily properties featuring many units, it can be hard for property managers to keep track manually of upcoming lease expiries. Even the best spreadsheet can’t beat the convenience of timely in-app notification.
Using automatic reminders, everyone is kept in the loop and is on the same page throughout the process, something that goes a long way to converting lease renewals.
5. Keep residents engaged with regular events and useful services
Work on converting a resident’s next lease renewal begins as soon as a resident has signed their lease. This is achieved by proactively engaging residents throughout the year. Engaging, unique experiences and excellent services that they would miss should they move out are proven ways to keep residents part of your property’s community.
Amenities are necessary to keep you competitive; but amenities don’t renew residents; the community they become a part of does. Resident events that give people the opportunity to interact with their neighbors, make new friends and feel like you belong to something special are key.
These should be a part of your residents’ calendar all year long, and should be balanced in format, size, and budget. We know it hard to come up with new event ideas every single month, so we’ve put together a few lists here:
- Resident event ideas for Summer
- Resident event ideas for Fall
- Resident event ideas for the Holidays
- Resident event ideas for Spring
6. Remind residents of everything they’d miss
It can sometimes be difficult to appreciate just how green the grass is on this side of the fence. Make sure they remember all the good times they’ve had at your community by putting together a personalized Renewal Letter.
We recommend crafting highly personalized lease renewal letters, with data on how many fitness classes they attended, which amenity they used the most, which events they attended, how active they were on the community feed, etc.
Granted, this is easier with Flamingo’s analytics tools and automatic renewal letter. But you can start small, with event pics and simple data and build it from there.
To help you get started, we have a surprise for you below.
Free Renewal Lease Letter Template
We have created a free template that you can use to put together your next renewal letter.
Get your free copy of the renewal lease letter template here.
