How friendship impacts resident retention for multifamily communities
Zego’s first podcast episode reveals why friendships are so important for resident retention in multifamily communities.
We did a thing here at Zego™. We recorded our first episode of The Resident Experience Podcast! New episodes will drop every other week and focus on resident retention for multifamily communities. Each episode will feature a guest with a unique perspective on improving resident engagement, reducing churn and boosting profitability.
Turnover costs mount when residents don’t know their neighbors
If you missed the first podcast episode, we welcomed Pete Kelly, CEO of Apartment Life. Apartment Life has been in business for 21 years and works to increase resident retention at multifamily communities.
Apartment Life has a unique approach to helping their clients retain residents. They work with apartment operators to foster friendships among residents. Because residents who don’t feel a connection to their home or to neighbors are likely to move when the lease is up.
If you aren’t certain this approach is the way to make residents stick around, the numbers may convince you otherwise. With the help of a third-party research firm, Apartment Life analyzed how turnover costs improved after companies focused on community building. On average, Apartment Life clients saved $188,000 a year on turnover costs, marketing costs, and staff retention!
The friendship factor strengthens resident retention for multifamily communities
Did you know that 61% of Americans describe themselves as lonely? You might think this isn’t a relative stat for the apartment industry. But it actually has a great impact on resident retention in multifamily communities.
When residents feel lonely, they often don’t feel like they have deep roots. So when it’s time to renew their lease, they’re just as willing to move to another community. But if they know their neighbors, that can change everything.
Apartment Life wanted to quantify this theory. So they teamed up with a third-party research firm to find out how knowing your neighbors impacts resident retention for multifamily communities. The results were eye opening.
- The average renter, who doesn’t know any of their neighbors, is 29% likely to renew their lease.
- Renters who have 1-3 friends in the community have a 38% chance of renewing.
- If your resident knows 7 or more people in the community, they are 47% likely to renew their lease.
Renters who feel connections with their neighbors are also more inclined to look the other way if market conditions impact their rent. Pete recalled a recent conversation with an apartment resident living in South Carolina. The renter had several close acquaintances living in the community. Even though his rent had increased 18% in the past year, the man still felt invested in the community because…he had friends he didn’t want to move away from.
Resident retention strategies for multifamily
Clearly, a sense of community can greatly impact the resident experience. And more importantly, your bottom line. So what are some things you can do to make your community a warm and welcoming place for residents? Here are some things Pete Kelly suggests:
- Welcome every new resident when they move in and assess their initial move-in experience. Take note of what they say and try to rectify any grievances they may have.
- Consistent events are key. But often, apartment operators fail to make them connective. It’s a good idea to have someone work as a host to introduce neighbors to one another and facilitate conversations.
- Recognize important life moments with a card or small gift (e.g., from celebrating a new birth to condolences)
- Conduct a renewal visit about 90 to 120 days before lease renewal for each resident. This is your opportunity to gauge their level of satisfaction with the community. More importantly, it’s an opportunity to let them know you value them as a resident in the community.
Listen to more advice about resident retention for multifamily on our podcast
The Resident Experience Podcast has an exciting lineup of guests scheduled! Zego’s own Nick Latz interviews some of the brightest minds in multifamily about creating standout resident experiences. Listen in on Apple, Google, Spotify, or Stitcher.