Why are leasing agents incentivized to acquire new renters but not to keep existing ones?

Why are leasing agents incentivized to acquire new renters but not to keep existing ones? I’ve never really understood this strategy from an operator perspective.
Also, why are existing residents not offered similar concessions to renew leases as new residents are to move in?
Would love insight here.

I have an owner that actually increased the renewal bonus higher than the new lease bonus because of exactly this discussion ($300 per renewal split amongst the entire team). You save on vacancy as well as turn cost so it’s a no-brainer.
For those of us that have been in the industry for years, you’d never think concessions on a renewal however, if you have someone paying above any market rate that you’ve been able to achieve recently, then it makes complete sense to offer a concession to stay and also make them feel valued.

If we’re being honest, leasing success is due in large part to the sales team, renewals in large part to the maintenance team

You are not crazy and this is exactly how I drive the bus on our props after we stabilize on our assets. Pay more in renewals than leases as the commission is easier on financials than vacancy, turn cost, etc. We also offer concessions to renewals so that it drives down the concessions on the new leases or review lease trade outs vs concessions if we adjust the resident to stay.

You keep current residents with great maintenance and customer service. Retention is key.

All staff members should be part of a renewal bonus incentive.
Much or the time new move in lease rents are often much higher than renewal rents . So guving a concession for someone to renew may not make much sense to an owner who can spend a little money to turn and release at a higher rate. However there is more to this complex equation as sometimes it takes several thousand to flip or even have vacancy.
Renewals are complex and should not be handled nonchalantly. There should be a lot of training and sales skill put into the art kf the renewal strategy. Which js why many large companies are centralizing this function in an effort to retain as best as possible for the maximum amount that works.

As a regional, I did this years ago. No concession for new move ins and renewal bonuses for renewals. Took them to market rent but gave them a set amount as renewal bonus upfront to use as they wanted throughout their new lease term. It rewards your current resident in good standing…they will likely renew and you are saving the cost to turn the unit. Never made sense to me to give a concession to a new resident who you don’t have an established relationship with and you really don’t know if they will be a good resident or not. As a result of making thus change, we had consistently higher occupancy rates than our competition and we saved on expenses. Win/win!

Do you all split renewal commissions? We have always carefully evaluated renewal rates because residents go on line to see current market rates.

Some companies do offer renewal incentives, it’s may not be as much as a new resident will receive, but it’s something. In my experience though, it’s typically because they already received a special when they first moved in. Usually.
And retention rates are usually budgeted at about 50%.
Our company offers renewal commissions that are then split between the staff, so there is some incentive for the leasing staff.

Some companies offer LR bonuses which are more than new lease bonuses as it should be.

We have a renewal incentive bonus structure that we implemented. The bonus is split with the team and the higher the renewal percentage each month, the higher the bonus is.
We also will offer renewal incentives to tenants on a property need or case by case basis. The incentive depends on how well the property is doing and how bad renewals are needed. We do anything from a Costco membership with a shopping gift card or a carpet clean and apartment clean, sometimes even $300-$500 off rent if they sign a renewal by a certain time!

If I lived in an apartment community, I would have to move every single year. I would have to move in order to keep up with the rent increases. Of course, this applies to rental houses as well. The increase in rent every year is just too much for someone on a fixed income.

concessions to everyone. Average renewal rate will be 50 percent. You can increase that and lower turnover by providing excellent service, a convenient experience, and a well maintained product. Owners need to raise market rents continuously to make the numbers look good for the mortgage company and their investors. They also need to show that they can sell the property for a profit if needed. If they give concessions to everyone, they just can’t make the numbers. It’s all a numbers game. All staff should be giving excellent service and should have a role in maintaining customer satisfaction- so it would make sense that renewal bonuses get split among the entire staff.

Because that’s the way they’ve always done it. But you’re right. Renewals should be rewarded! But only if you get a decent rent increase.
General rule, shave off your bottom 10% every year. Your lowest rents by unit type, etc. Some folks just gotta go, or pay up.
It’s not an easy job.

Laurel Zacker posted an incredible analysis on LinkedIn - a "mathy" reason for working on renewals! You need to read it and share! It reinforces your point so well!  www.linkedin.com/in/laurelzacher/
 

That’s a great question to challenge outdated business practices, especially given the high cost of replacing a resident. Why not reinvest those costs into rewarding renewals and empowering teams to provide exceptional service—building communities where people truly want to stay?

As an industry, we accept a 50% turnover of our customer base each month—something unheard of elsewhere. It’s time to refocus our renewal and retention strategy for both site teams and residents.

The financial impact of replacing a resident is significant, yet we often incentivize teams to acquire new customers rather than retaining the ones we already have. Instead, we should be prioritizing strategies that extend the lifetime value of our residents—an approach that operators must not only embrace but execute effectively.

One of our partners has taken a bold step in shifting its bonus structure, offering incentives for "saving" residents who initially planned to move out. They even reward teams for retaining residents who previously indicated they wouldn’t renew in surveys.

It’s time to challenge the way we’ve always operated. Resident retention is everyone’s responsibility, and every operator needs to make it a priority. The status quo won’t be enough to sustain success in 2025 and beyond.