Topic: Actual turnover statistics

As much as I appreciate Satisfacts and their estimated 60% turnover...
I would like to hear from YOU and what your actual turnover is?

First, I'll pull up our skirt and tell you we average 66% turnover/annum.

How about you?

I thought the industry would have a 30% turnover, but to me it is embarrassing to work in an industry that has such a poor statistic, which I translate into...
"We don't care much about you, you are already a prisioner in our community, we are seeking new inmates, they matter more." As much as we scream we are professionals, this turnover number screams a different tune to me. (yes this last paragraph is strictly my opinion)

thanks,
Martin

I think our industry can't be compared to other industries "apples to apples." So to say 30% or 66% is "bad" by comparison to other industries may not be appropriate. There are so many factors otnot within our control that cause our clients to go elsewhere. The economy, employment, and family all play a huge part of clients decisions, whereas in other industries they are not part of the decision at all.

My 2009 turnover was 58%, 2008 was 39%. I see this as a direct response to the econcomy downturn. As the recession hit, residents lost their jobs and had to double up or move in with family, leaving us with two people moving out and only one (if that) moving in. We had to work twice as hard to find new clients, but these new clients were also on precarious ground financially.

Location is also a major factor. I am next door to a shopping mall, and on six public transit routes. Thus, I heavily attract young, low income retail workers who can't afford a car. After gaining a few years work experience, they move on to a grown up job and move to a place with parking.

No matter how good of service I provide, some of my clients must move on. And while I know its not the best thing for my property, I'm happy for them. :)

It's been a while, but I think I remember Doug Miller (of SatisFacts) telling me that 1/3rd of turnover is non-savable. That would leave 40% as the excess turnover. But even beyond that, I think that an individual community could lessen even the non-savable turnover using different application acceptance techniques.

Rose, just out of curiosity, for your specific community, are you collecting the data that tells you exactly why each of your move-outs actually leaves? And then are you calculating that to determine your non-savable number?

We do have a space on our 30 day notice form asking their reason for leaving. About half of the time the move is listed as due to a job relocation or family change. A lot of people just leave it blank. In the two and a half years that I have been here, only three people have left because they were unhappy with management.

As soon as we get a notice, my maintenance tech talks to the resident to see if they need any maintenance and finds out if there is anything we can do to convince them to stay. We are able to convince about 5% of our notices to stay, but they only stay for one more lease term.

It's a great idea to track the reasons people leave. I don't have time to dig through all the old files to check, but I'll start a spreadsheet to track it from now on. I used to manage the results department at an ad agency, I love collecting data! Thanks for the idea!

Statistics are good to keep, but what's the plan with them. I always use 50% turnover as a starting threshold on a property. If turnover is greater than 50%, then we need to find out why and improve the situation if possible. Is it market rents, lack of customer service, local economy, unit-type or maybe as Rose mentioned, tenant-type.

This also means that you should be turning over every unit every two years. That should allow you to adequately maintain the property and schedule unit upgrades on a systematic basis.

If turnover is less than 50%, then the same holds true. Rents too low, etc.

I have to disagree Jamie.

I don't want to turn over each unit every two years. I want my residents to love our community so much that they want to stay forever. I have one resident who has lived here since 1981, and about a dozen that have been here for more than ten years.

We do raise rent a little at lease renewal if the economy allows us to remain competitive, but our goal shouldn't be to raise our prices so much that we drive our customers away within two years.

I would love to have the ability to reward long term residents with smaller rent increases, but sadly, fair housing does not agree.

My average turnover since I have been at my property is 48%, which is lower than average, but my rents are in line with the other communities in my area. I am hoping to see a decrease in my turnover as the economy improves.

Rose - Why is that not ok with Fair Housing?

Oregon fair housing says we must treat all residents, old or new, exactly the same. We can't give a new resident a bigger rent increase than a long term one. I think that is taking fair housing a little too far, but it's not my decision to make.

We reward long term residents in other ways instead. A better parking space via a wait list, a carpet cleaning after a lease renewal, an offer to touch up paint their apartment or upgrade their an appliance, etc.

From what you and others have said, Oregon seems to be a very anti-property management state... That's really too bad - I'm with you that longer term residents should be given more perks and benefits, and I don't see how doing that is discriminatory in the slightest.

Oops, just can't stay away from this thread. Oregon has a very strong group of tenant advocates and, in many cases, landlords have not done themselves any favors. But it sounds like Rose's management company or ownership has taken a very conservative look at fair housing law.

Fair housing laws are set up to prevent discrimination based on protected class status. In the example that Rose makes, offering a different incentive or rent increase to a tenant who renews a lease term based on how long the tenant has lived at the property is not a fair housing violation, as long as the same incentive is offered to all in that group.

I can't stay away either. It's a great topic. :)

Yes, Oregon's renters' rights organization is very strong, as is the fair housing bureau. Even though we have a lot of protected status', the Fair Housing recommendation and thus company policy is that we must treat everyone exactly the same.

Does anyone know where I could get turnover statistics that could be cited to in an academic paper?

The only source is the National Apartment Association's annual income and expense survey. If you email me at This email address is being protected from spambots. You need JavaScript enabled to view it. I will email you a summary we did of 2004-2009.

I constantly here "Fair Housing" cited as, "We must treat everyone exactly the same all the time". That is an incorrect application of the law. Fair Housing outlines protected classes. To give all black families large increases and all white families small increases is a violation of FH. To give one unit a $75 increase because they are $85 below market rent and another unit a $25 increase because they are $35 below market rent is not a violation of FH. There is not discrimination there, simply the application of metrics to the differing circumstances of each unit.

The Reasonable Accomodation law bears this out. This law outlines giving certain residents specific accomodations if they meet certain requirements. Not every resident can get these accomodations, but that isn't a FH violation. It's simply that everyone who meets the requirements is qualified to receive the accomodations - it would only be a violation of FH if you selectively "qualified" people based on a protected class (race, color, religion, age, sex, etc) en.wikipedia.org/wiki/Protected_class.

I've heard someone say, "Oh we can't change the unit prices today because we've already toured someone." This is another misapplication of the FH law. You can change the unit prices whenever you want, they just have to apply to everyone that comes in at that time. If the unit price from 9am-12pm is $1500 and then $1750 from 12pm-6pm, that is ok as long as everyone who comes in during that time is given the same price. Now you can't give one family $1500 at 9:06am, another family $1750 at 10:00am, and then another family $1600 at 10:15am - unless of course you had printed documentation to show that your current unit prices were officially those prices at those times and it was not connected to who came in when.

Remember, federal fair housing laws apply to all states, but each state also can have their own additional requirements.

In my state (Oregon,) the Fair Housing Bureau does require that we treat every prospect, and resident exactly the same.

Many local fair housing agencies offer training classes. Grace Hill has a class on the Federal Fair housing history and current requirements.

What can actually reduce this (beyond the 30%)? Is the excessive turnover due to specific differentiation (poor customer support, noise, etc) or simply due to market trends?