jpiccotti's Blog

Even as we’re able to start pushing rents in the market, it is still “Mission Critical” to increase or, at least, maintain net operating income (NOI) and asset value – which happens when we increase resident retention.  However, it isn’t the resident functions or monthly drawings that will help residents feel better about rent increases and renew their leases.  In surveys conducted by SatisFacts Research, “office staff responsiveness to calls and emails” still has the greatest impact on the decision to renew.  By creating a culture of responsiveness, a property management team can not only increase resident satisfaction, but can even increase retention despite rent increases!

Here are some examples of resident quotes taken from completed resident satisfaction surveys: 

“The biggest problem to me is to get a response from the person who was my leasing agent. I have tried to set up a meeting with the manager about my concerns but have had no luck.”

The leasing agent smiles warmly at the nice-looking woman dressed in jeans, a tee shirt with her hair pulled back in a pony tail. She could swear she's seen this person before.

"Yes! Yes!" The woman wants to scream. "I was the one you called every other day for the past 2 weeks so I would sign a lease. I finally said yes! So here I am. Moving van outside. Am I in the twilight zone?"



According to the current SatisFacts Move-In Index, 5% of all new move-ins say their keys or lease agreement is not ready when they arrive on Move-In Day. What a missed opportunity! Our leasing and sales teams spend a lot of time and energy getting prospects excited about the idea of moving in to this community. Once that prospect agrees to move-in, the excitement needs to continue. There is nothing worse than showing up to your new home, expecting the welcoming committee to be waiting for you, only to discover that not only were they not prepared for your arrival, they don't seem to even recognize you. How disappointing! The lease renewal decision begins in the first weeks, days, even hours of moving in. If the stage is not fully set for a new resident's arrival, there is a significant chance that new resident may begin regretting their rental choice almost immediately. You don't want their first thoughts at move-in to be those of moving out!

Before close of business each day, ensure everything is prepared for any move-ins expected the following day. What are the names of all the new residents (including any children)? Are the lease documents ready and printed? Are the keys, gate remotes, access cards ready to be handed over?  Who has conducted the final walk through of the home to ensure it is spiffed, and all appliances and fixtures are in good working order?

Start off on the right foot by welcoming the new residents warmly. Help them feel great about their decision to make this their home. Move-In Day can have enough challenges and surprises. Anything the office or maintenance team can do to minimize surprises for the new residents will pay dividends in the months to come.

In every resident satisfaction survey conducted, we ask the question, “How likely are you to renew your lease?” The options are: Very Likely, Somewhat Likely, Not Likely, or I Don’t Know. If the resident does not select “Very Likely,” we follow up with the question, “Why?”  Based on the 2010 SatisFacts Index, the #2 answer (right behind “Rent Increase”) was “Neighbors.” Nearly 13% of residents indicated they have a significant issue with their neighbors!

The nature of apartment living is that we all have to learn to be good neighbors. Some are more conscientious than others, this is true. Some are not aware of an inconvenience or disturbance they may be causing through their actions. Others are just plain indifferent about whether or not they are bothering anyone.

According to the SatisFacts Index, 23% of all residents have an outstanding maintenance issue. Some may be a result of a service request that wasn't completed properly the first time or a repair that didn't hold for whatever reason. Some may be a result of the maintenance team not having all the correct information and therefore not addressing the correct issue.  Some may be issues that have not been reported yet. Any way you slice it, nearly one-quarter of all residents currently have a maintenance issue in their home.

Research shows that the more residents who have outstanding maintenance issues, the lower overall resident satisfaction is. And the lower resident satisfaction is, the less likely they will be to renew their lease. However, these silent but deadly ghosts of maintenance issues past and present do not have to be the reason for losing a resident.  By focusing on the service request process from start to finish, these issues can be banished for good!

The service request resolution process is a team process that is critical to the resident's perception that this community is an "easy" place to live. They don't have to work hard to get attention or service when needed. And as a team process, it can be helpful to break down the entire process and see if every team member knows his or her role.

Step 1 - Provide education to the office team on what information is most useful to the maintenance team when taking a service request. One helpful exercise is to get maintenance and leasing together and list out the 10 most common service requests at the community. For each of those service requests, have the maintenance team provide the 5 most helpful questions the office can ask the resident. 

Step 2 - Establish a standard of entering all service requests into the PM system immediately. No more writing on post-it notes or a note pad. The faster the request is put in the system, the faster the maintenance team can access and resolve it.

Step 3 - Audit the parts, tools and equipment available to the maintenance team to ensure they can resolve the most common maintenance issues quickly and easily.  Provide continuing education to ensure the maintenance team has the experience and certifications needed to address their community's most common needs.

Step 4 - Ensure the work area in each resident's home is left as clean or cleaner than the maintenance team originally found it. This shows respect to the resident's home as well as instilling confidence in the repair itself.

Step 5 - Identify whose responsibility it is to notify the resident of any delays. If a part needs to be ordered, if a specialized vendor needs to be called in, who will let the resident know? 

Step 6 - Follow-up after every service request is closed out in the work order system. This accomplishes 2 things: 1) Was the service request completed to the resident's expectation? If so, great, if not, let's take care of it immediately. 2) Is there anything else we can take care of for you?  This second question will often jog the resident's memory of something they keep forgetting to mention, or something that may have been bothering them for awhile but they just haven't got around to letting you know. 

Providing the highest level of service is a continual journey of fine tuning the resident experience. By taking a look at the service request process you have in place and enhancing areas of opportunity, your entire team will feel more productive, and your residents will feel the difference!

According to the 2010 SatisFacts Index, when asked what can be done to improve the community, residents ranked “Social Activities” #29 out of 30. All this hype about being 29^th?

Consider this scenario: Ms. Jones is going on Day 3 of being without A/C during a week-long heat wave. She has submitted her service request online and has also called the office. As she looks out her open window, desperately trying to catch a breeze, she sees the property manager directing a couple of maintenance techs on the set up of chairs and tables for this afternoon’s resident pool party. How thrilled do you think Ms. Jones is about the upcoming pool party?

What is it about those certain residents (and let's be honest, we've all dealt with them) that causes a roomful of otherwise mature professionals to suddenly revert to  8-year-olds on the playground? "1-2-3 Not It!" everyone declares, in their own way - whether averting their eyes from the approaching resident, answering a non-ringing phone, or suddenly deciding the printer urgently needs new toner. The leasing agent who has not found an occupying task quickly enough is now "It" and must assist That Resident.

'Tis true, these interactions can feel draining and less-than-productive. Here are a few tips to fall back on to make lemonade out of lemons, or at least add a twist of lime to your crushed tortilla chips:

- Listen. Really listen. Too often, we can believe we are listening, when in reality we are forming our next response. By carefully listening to the issue, you may be surprised to discover there is a misperception at work or a simple clarification that can resolve the issue quickly and easily.

The spring lease expiration season is fast approaching, and that means you have a prime opportunity to maximize your lease renewals. It's time to invest a little time, love and tenderness (Sorry, sometimes Michael Bolton lyrics say it best).

According to the newly released 2010 SatisFacts Insite Pre-Renewal Index, 27% of residents whose leases are expiring in the next 90-120 days indicate they have a maintenance problem that still exists. That means more than 1 in 4 residents has a maintenance problem that you have not solved.

Some of those issues may be capital expenditures that are not budgeted (like replacing drafty windows), and can't be resolved in the way the resident would like. But some issues may be due to a repair that didn't fully take care of the problem, or a new, related problem that just occurred. And some may be issues that you don't even know about. Yet. 

Pick up that phone. Call your residents. Ask them how everything is in their home. Whether you call it a warm call, a resident wellness call, or some other title  - it doesn't matter. Just call! "But asking them about what's wrong in their home will open a can of worms," you may say. It may, indeed. However, I would much rather ask my maintenance team to address the half dozen little issues in Mrs. Smith's home this week rather than have to ask my maintenance team to incure thousands of dollars in time and materials in turning the apartment because she was tired of waiting for the little issues to be resolved.

In many of the case studies we have reviewed on what difference resident retention makes on net operating income, we've learned that saving even one additional lease renewal per month can translate into well over $100,000 in increased NOI and over $1 million in increased asset value. And that is just at one property!

Pick up the phone. Show your residents some love. Ready. Set. RENEW!

Here are some concepts to throw around at the next staff meeting:
1. To your customer, you are the company.
2. To your customer, your signage/market window/leasing office is the property.

Case in point #1 (experienced this weekend)
While browsing through a local clothing boutique, I heard a customer explain to the lone sales clerk that the clothes she tried on didn't quite work. They felt like they were cut for another body type, she said. "Yeah," replied the sales clerk. "All these clothes are cut totally weird. They look cute on some people, but I can't wear any of it."

Case in point #2 (experienced 20 minutes later)
While checking out with my 3 items at the grocery store, the cashier (who has been there for years and years) saw my deli item didn't have the proper bar code. Rolling her eyes, she sarcastically (and rather loudly) joked to the bagger, "Whatever! They don't tag it properly, they aren't getting credit. No one wants to do their job around here any more." She then commented to me, "This place is ridiculous. I'm so over it." Then, jokingly, "You're not a secret shopper, are you?"

Case in point #3 (experienced within the past month)
While driving across the state and passing through a small town in the middle of nowhere, we saw this sign.


At that point in the journey, because there was nothing else around for at least an hour in any direction, it may have been tempting. But I'm not staying at a "Shady" anything, thank you very much. Drive on, Jeeves.

Whatever the resident sees or hears from you or your property is what they believe to be true of the organization as a whole. What are you showing or telling about your company? What should you be showing and telling about your company?

Jen Piccotti is VP Consulting Services for SatisFacts Research. www.SatisFacts.com

In my last post, I made the bold claim that every time a resident chooses not to renew his or her lease, it costs the property an average of $4300. One reader asked me to break down the $4300 cost, and I thought that was an excellent opportunity for all of us to compare some notes. I have just updated all our figures, and the economic landscape has improved... a bit. Based on national average rent and concession data from Axiometrics, turnover costs have dropped to just over $4000 per move out - still quite painful! Here's the breakdown:



Obviously, different markets are experiencing different average rental rates, different concessions, different vacancy loss days, etc. But this gives a starting point to begin evaluating what the true cost of turnover is for your community.

I went through this exercise with a group in the Orlando, Florida area and a group in the Rochester, New York area recently. Two very different markets, but with surprisingly similar turnover costs. Each group calculated turnover costs ranging from $2700 to $4000 per move-out.

What turnover costs have been overlooked here? Over stated? Under stated? 

Jen Piccotti is the VP Consulting Services for SatisFacts Research, the experts in resident feedback and retention programs. www.SatisFacts.com

Most property management companies have a lease renewal process that begins 60 - 90 days prior to lease expiration. Internally, managers may be calculating renewal rates, regional managers may be setting renewal goals, leasing teams may be printing renewal notices. However, there is more to retention than just rental rates and renewal letters. According to the 2010 Mid-Year Insite Pre-Renewal Index, 27% of residents whose leases are expiring within 120 days have an outstanding maintenance issue.  That’s more than 1 in 4!