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Employee Engagement

The latest multifamily research and data regarding the impact of employee engagement on resident retention, online reputation, and revenue growth.

Resident Retention: Recession-Proofing your Community

According to First Advantage SafeRent, year over year, 2008 vs. 2007, application volume has decreased nationally by 7.8% and this negative trend is consistent across A, B and C asset classes (http://fadvsaferent.com).  And RealFacts reported that rents decreased across the entire U.S., with occupancy dropping from 92.9% to 92.2%.  Talk about Gloom and Doom!  Things are not looking great. When faced with a shrinking applicant pool and net effective market rent decreases, retaining existing residents who are typically at higher rent levels becomes mission critical.

 

But check this out:

 

Annual Survey Respondent Renewal Intentions

How Likely Will You Be to Renew Your Lease: Annual Survey Results

 

2008

2007

Change

Very Likely

43.6%

43.6%

0.0%

Somewhat Likely

28.0%

26.7%

1.3%

Not Likely

16.4%

20.3%

-3.9%

Don't Know

11.5%

8.9%

2.6%

Refused

0.2%

0.3%

-0.2%

 Source: SatisFacts Research (www.SatisFacts.com)

 

There’s an interesting opportunity presenting itself to those who will embrace it. The message that is loud and clear is that retention is the answer to recession-proof your community.  It is critical to hold on to the residents you have, as there are fewer and fewer prospects and rental applications coming through our doors.  With accelerated job losses and the subsequent move outs those losses produce, renters with job security become very valuable assets to property managers looking to reduce turnover costs and ride out the storm.  The national turnover rate has slightly declined, although it has been consistently high over the last six years ranging each year between 59% and 62%.  By the by, please note SatisFacts clients average only 52.5%!  Looking at our findings on resident intentions to renew their leases we have made an interesting discovery.  Despite increasing satisfaction scores regarding key drivers in the renewal decision, the percent citing “very likely” to renew did not change.  However, signs of the time and the value of pushing service delivery show up when one looks at the other response options.  “Not likely” to renew dropped by a noticeable four points, with respondents appearing to shift to “Somewhat likely” and “Not sure.”  This may reflect a shift in uncertainty about jobs, pay cuts and cash flow – competing against increased satisfaction.  Today’s uncertainties and the above results  validate the returns for properties working harder than ever to make sure residents perceive value for the rent they pay…especially when they get their lease renewal letter.

 

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