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Home Insider Blogs Brent Williams's Blog Lease Renewal Form Steps In it
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Jan 30
2009

Lease Renewal Form Steps In it

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Posted by: Brent Williams on Jan 30, 2009 01:00

I am a proud apartment renter, and today I received my lease renewal offer as it slid through my front door. I thought it would be a good example to share with the group and see what people think! (My comments are in italics)
 

"Dear Brent Williams, (my fiancee, incidentally with her name spelled wrong):

The lease on your apartment #XXXX will expire on 03/31/2009. We are currently offering the lease renewal terms and rates shown below.

  1. You may sign a 12 month lease renewal for $XXXX per month. (a $96 increase)
  2. You may sign a 6 month lease renewal for $XXXX per month. (a $107 increase)


This offer will expire on 3/31/2009. If you do not choose to renew your lease, you may remain month-to-month for a new rent of $XXXX. (68% higher than the 12 month lease offer)

We hope you will continue to make your home with us. Should you have any questions, please call or come by the management office.

Sincerely,

XXXXX, Property Manager"


So before we get comments from everybody, here are a few of my own:
 

1)  This was the first time they have ever contacted me since I moved in.

2)  The letter came the evening before I had to make my decision based upon the 60 day notice to vacate. Do they think their residents appreciate that type of timeline, or is it a way to bully them into staying because they cannot make the 60 day notice? Either way, you can tell what type of impression it made on me.

3)  The month to month rate was 68% higher than the normal amount! If I weren't so damn classy, I would equate that to a prison shower scene! The only people who would ever take that type of deal are the ones who don't have any choice - and do they really want to take advantage of people like that?

4)  In this market, a $96 increase is incredibly steep, even for Houston. First, are they really doing that well that they can attempt this type of increase, and second, is this really the best effort they are going to make on trying to sell me on it?

5)  I don't expect the letter to drip with meaningless statements about how great a resident I am, but they could fake it just a little bit! There is no other service that I use (i.e., cell phone, electricity, car note, etc) that seems to care less about my business than this letter shows. I pay them thousands and thousands of dollars and the best they can do is this letter? Seriously?


So what does everybody else think? Do you have a property that has a similar lease renewal form?


Comments (18)Add Comment
500
written by donwood, February 01, 2009
I agree with your comments. The letter sounds rather impersonal. The timing of the letter is terrible. You should have received notice much earlier. I would think a notice that elicited some two way communication would be far more effective.

Not to hijack this thread, but it does remind me of the blog I wrote on Letters & Notices. A community should use such a feature to communicate more often with the residents rather than waiting until renewal time. It would be a good policy to have positive notices dropped off during the tenancy.
82
written by ruthie61, February 01, 2009
WOW! Impersonal! Bad time line! Huge increases! And big time punishment if one is unsure of their future as far as their job goes---they can't afford to go month to month! And yet it cost money and time to move!

They could use a good resident retention program!
62
written by InsiderBrent, February 02, 2009
Thanks for the comments, you all! I'm planning on stopping by the office to discuss it with them - we'll see how they handle objections! smilies/smiley.gif
85
written by CharityHisle, February 02, 2009
Talk about stepping in it! It sounds like you received your notice to move...
82
written by ruthie61, February 02, 2009
Let us know how the office handles this! It may become a great lesson in customer service and resident retention!
62
written by Brent Williams, February 09, 2009
Update! So I went to the office and talked with one of the leasing consultants. She wrote down my current rent, took the renewal letter, and left to talk with the manager. She came back and said that because I had gotten such a good deal at the beginning that they can't go any lower on the near $100 increase. Truth is, I did get an unbelievable deal and I understood that and was ready to accept the increase, so she should have just let it at that.

But considering I was blogging about this, I wanted to dig a little deeper, so I asked what system they were using and she said Yieldstar. So as I silently cursed Yieldstar smilies/wink.gif I asked how much flexibility they had. This is where she really screwed up. Instead of sticking to her guns and saying that the renewal price was fair, she said that they have to go by what Yieldstar tells them, and they don't have wiggle room like they used to. So why did she bother talking to her manager?? Obviously, her actions contradicted her, which left a sour taste in my mouth.

But in the end, we will be renewing. Although the leasing staff doesn't wow us in any way, they do a decent job in other aspects (i.e., maintenance, landscaping).

One question this does bring to mind, however, is this: Does Yieldstar compute the price based upon what it thinks the market will bear and then offer that to residents? In other words, if I had declined, would Yieldstar then price that apartment at the same price (all else being equal)? Does it take into account turnover cost? Speaking as a resident, I think I deserve a better price than a new resident because I am significantly more profitable as a resident. Am I being rewarded for being more profitable?
500
written by Don Wood, February 09, 2009
I'm actually working on a blog about revenue management with the Yardi system. I can tell you that YieldStar uses a proprietary calculation engine that crunches the numbers based on numerous factors. One of their big selling points is to take the negotiation ability away from the leasing staff and let YieldStar handle the rates.
349
written by Michael Cunningham, February 12, 2009
@Brent,

Regarding your question about YieldStar, I got this response from one of our product and pricing experts at RealPage, Keith Dunkin:

Thanks for sharing your experience. Renewals are a key component of the YieldStar system and have brought flexibility, improved customer service and increased revenues to YieldStar customers nationwide. While there is certainly a “what will the market bear” or supply and demand component influencing renewal pricing, YieldStar allows extensive configurability to its users on a property by property basis. This flexibility allows for renewal pricing to be tailored based on the current market condition, current resident lease (including rent and term) and overall strategy for the property. By blending the science of revenue management with operational expertise, the property is given maximum flexibility to accommodate the needs of its residents while driving improved revenues for the asset.


Doe this answer your question? Generate more? Let me know.
62
written by Brent Williams, February 12, 2009
Well, it didn't cover my question as to whether it treats renewal pricing different from new lease pricing, but it did give a hint at the flexibility aspect, and makes me wonder if my community hasn't adjusted their system to reflect the current economic climate... Thanks for the update, Michael
349
written by Michael Cunningham, February 12, 2009
Sorry to be unclear. Here's a clarification:
Yes new leases and renewals are priced independently and then evaluated collectively as we arrive at unit type prices to maximize revenue. We evaluate renewal conversion rates by unit type, recently achieved renewal rents and the volume of expirations specifically related to pricing renewals. That said, the client is then afforded extensive configurability per property.
62
written by Brent Williams, February 12, 2009
Very interesting - thanks for the updates and information Michael (and Keith)!
82
written by Gerry Hunt, February 12, 2009
Just a thought--It would be interesting to find out what would happen if you put in your notice. Would they then be interested in negotiation?

With the economy what it is, properties are more willing to negotiate with residents who puts in a notice to vacate, expecially if they are good paying residents!
2488
written by Whitney Garrity, October 20, 2009
Very eye-opening all the way around! I can't get my around the fact that this is the first time the office has even contacted you! I started in April and I've occupied 50 of our 200 occupied apartment. I know their names, their pets and make sure I check how things are going with all my move ins. Helps that I live on site.
62
written by Brent Williams, October 20, 2009
What's even worse, in my opinion Whitney is that I work in their industry. Of all the people in their community, you'd think that I would be one of the few that they remembered and took a moment to get to know, if only because we have something in common. And although they are always pleasant, they show no signs of actually caring at all who I am.
4662
written by Megan Colburn, June 15, 2010
We don't use an LRO type system and I find that benefits us greatly. 5 of my 7 top competitors do, and when their residents get letters like yours, they come to us. We base renewals on what a person is already paying and current market conditions/availability. My pricing is higher than all of my competitors yet I've had an average occupancy of 97.5% since January 1st in an area that averages 93-94%. Taking the time to care about your people makes a difference. Even if they had no wiggle room in their renewal pricing...I'd be willing to bet their apartment ratings, their referrals, their occupancy and their NOI would be greatly improved, with simple regular phone calls to their people and a little courtesy. Showing folks that there is real value for their buck and that you care that they chose to give their hard earned money to you goes a long way toward your bottom line in any economy.
0
written by SpideyJ2000, December 30, 2010
Is it illegal to leave a renewal on a residents door for them to sign and return? Or to put it in there apartment?
62
written by Brent Williams, December 31, 2010
Hi "Spidey"! I can't say for sure, but I have never heard of that type of law.
0
written by SpideyJ2000, January 03, 2011
Thank you. I havent heard of it either but my supervisor said it was. Thank you for your response. Happy New year to all!! smilies/smiley.gif
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