Everyone understands the value of earning more renewals right now. Turnover costs are rising, as is vacancy loss, so avoiding those expenses is a priority for apartment operators everywhere.
Of course, a lot of focus goes toward renewal rent prices. Rent causes residents to stay or go.
If you can get your renewal pricing right, you can influence more residents to stay in your apartment community and continue to generate rent revenue with zero interruption.
But is there more to the renewal equation than just pricing? Respondents in RealPage's 2023 National Multifamily Renter Study offer other alternative incentives that would cause them to renew their lease. Let's break their insights down.
82% of renters say unit updates would persuade them to renew their lease.
When someone's lease is expiring in the next couple of months, they have a big decision in front of them.
Sweeten the pot by sweetening their apartment unit. Offer a unit upgrade with new appliances, fresh carpet cleaning, or new technology that makes their living experience at your apartments irreplicable.
Sometimes, no matter what you do, they'll choose not to renew. It may be part of their plan all along; they're getting married, saving up enough to put a down payment on a home, or finishing school and entering the real world. If these are 'amicable separations,' you're doing something right.
But for many of your tenants, there was a reason they chose to rent one of your apartments in the first place. And your community must continue promoting their desired lifestyle for them to decide to extend their stay.
In that light, according to the survey, renters would choose to renew if that decision includes unit upgrades. Why? Your community already has the things they're looking for—that's why they've chosen to live there! Sweeten the pot by sweetening their apartment unit. Offer a unit upgrade with new appliances, fresh carpet cleaning, or new technology that makes their living experience at your apartments irreplicable.
79% of renters say flexible term lengths in their renewal offer would persuade them to stay.
Being flexible in the lease terms you offer in renewals is one of the strategies we recommend in our lease renewals guide; doing so gives you better control to position the timing of when a lease expires so it has minimal impact on community performance.
It turns out that providing flexible term lengths in renewals isn't just a clever tactic for your community—it's also something tenants want.
They desire to renew in terms other than one year, whether shorter or longer. Provide options, but don't be too crazy with offering numerous lease terms. Three varying term lengths in the renewal letter are enough to avoid paralysis by analysis.
78% of renters would renew their lease if they could do it electronically.
More and more renters today are becoming comfortable searching for and leasing apartments without ever interacting with anyone. And that same trend is also affecting the dynamic between on-site teams and current residents.
It makes sense, then, that there's a desire to complete the renewal process electronically, too, because it's a similarly seamless, self-guided process—even though many property management companies still use the traditional method of leaving a renewal letter in a tenant's mailbox.
That's why online tenant portals are becoming popular, allowing tenants to request maintenance or pay their bills online.
It makes sense, then, that there's a desire to complete the renewal process electronically, too, because it's a similarly seamless, self-guided process—even though many property management companies still use the traditional method of leaving a renewal letter in a tenant's mailbox.
There's enough statistical significance for electronic renewals that it's time to consider adopting that in your community's renewal process.
65% of renters say receiving a present for renewing would entice them to stay.
Offering a renewal gift is definitely an option to keep in mind, but not a one-size-fits-all approach. While presenting a gift card to a local restaurant or store seems like a generous touch to someone after renewing with your apartment community, 20% of respondents in the survey say that a gift would not make any difference.
Summary
- Multifamily renewal strategies extend beyond financial incentives, with various factors influencing tenant decisions.
- Unit updates, flexible lease term options, and electronic renewal processes are key factors that persuade renters to renew their lease.
- Offering a thoughtful present as a gesture of appreciation can also positively impact tenant retention, though it may not sway everyone.