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Home Insider Blogs Mike Whaling's Blog The Numbers on Resident Retention
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Oct 05
2009

The Numbers on Resident Retention

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Posted by: Mike Whaling on Oct 5, 2009 01:00

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A huge thank you to Doug Miller and Jen Piccotti from SatisFacts, who led a great conversation about resident retention on last Friday's Apartment Chat. They provided lots of hard-hitting stats about the true costs of resident turnover.

Here are the questions that were discussed:
  • Why does controlling resident turnover matter?
  • What matters most to residents when considering renewal?
  • How does technology impact resident retention?
  • When does the resident renewal decision begin?
Check out these interesting stats provided by SatisFacts during the discussion:
  • Average cost of turnover = $4500 per move-out (Includes avg. rent, vacancy loss, wages, ads, promo, concessions, repair/replace, etc.)
  • The average resident turnover for 2008 at properties nationwide was 59% (According to the NAA).
  • If a 5,000-unit portfolio can reduce turnover by 9.5%, that portfolio's NOI can increase over $2 million.
  • The same 9.5% improvement in the same 5,000-unit portfolio can increase asset value over $26 million.
  • 60+% of turnover is controllable, primarily by improving office staff performance and responsiveness.
  • Communication from staff and work order resolution are generally more important to residents than apartment appearance and condition.
  • 60% of residents want to communicate via email. That has DOUBLED in the last two years! Yet, on average, property managers only have about 15% of their residents' email addresses.
You can calculate the NOI impact of reducing turnover with the SatisFacts turnover calculator.

Here's the link to the full transcript. (Over 600 tweets!)

What are you doing to improve resident retention at your property and throughout your portfolio? Leave your ideas and share your experiences in the comments.

Comments (5)Add Comment
211
written by Jen Piccotti, October 05, 2009
Hey Mike! Thanks for the overview! What a great experience. I think the best thing we can keep in mind for the current economy is that our strategies don't have to be sexy - just effective. That effectiveness comes down to basics: returning all calls and emails same day and resolving work orders correctly the first time. Thanks to all who participated in APTChat!

-Jen Piccotti
77
written by Mike Whaling, October 06, 2009
Jen, thanks again to you and Doug for leading this conversation and sharing such interesting information. Your point about getting the basics right is well taken ... it's something we can all work on, no matter who we serve.
679
written by Jonathan Saar, October 06, 2009
It may now be a huge reality check for this industry to stop using the expression "I think" and now use numerical facts to base their future ideas. There are a lot of intriguing ideas that have been shared on how to retain residents, but those ideas and their effectiveness need to be measured against what numerical facts dictate. 1 + 1 does not equal 4---JS
1973
written by Blake Ratcliff, October 08, 2009
Excellent piece. Tracking down the statistics can really make a difference in results.

Blake Ratcliff
www.apartmentmarketingsolutions.com
77
written by Mike Whaling, October 13, 2009
Jonathan and Blake, thanks for stopping by.

You're both correct ... the numbers don't lie. Once we have a better understanding of the cost to replace a lost customer, I would hope we'll put more effort into taking care of and keeping the customers we already have.
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