Smart operators know the importance of resident retention. A high lease renewal rate can boost net operating income (NOI) by reducing the marketing expenses and turn costs associated with filling vacated units.

Statistically speaking, apartment operators have a new weapon in the battle to retain residents: lifestyle services such as dry cleaning, dog-walking, housecleaning, folding clothes and watering plants.

According to Spruce's internal review of its data, apartment residents who use lifestyle services are significantly more likely to renew their leases than those who don't. The study showed that residents who purchase at least two lifestyle services have a renewal rate of 81.4 percent. When apartment renters purchase more than 20 lifestyle services, their renewal rate jumps to nearly 90 percent. That represents a 1.8x improvement for properties.

By contrast, residents who didn’t purchase services at the same communities renewed at a rate of just 68 percent. For additional context, consider that according to a RealPage analysis of the 50 largest U.S. markets, the overall apartment resident retention rate was only 52.5 percent in 2018.

Clearly, lifestyle services are an effective way to keep renters in the fold — not only mitigating resident acquisition costs but the resource burn on properties and managers in turning over units.

Why They're So Impactful
So why do services have such a dramatic impact on renewal rates? To start with, residents today lead hectic, busy lives. They appreciate it when their apartment community can source and enable professionals to handle their everyday chores and regular responsibilities. This gives them part of their day back and allows them to use their downtime to relax and unwind. Properties benefit from an intangible sense of goodwill.

On top of that, when apartment communities are able to send the same service professionals to residents every time, the residents usually develop strong emotional ties with the professionals. They grow to think of the dog walkers and the housekeepers that help them almost like family members. They can get to a point where they think, "My dog will be devastated if they can't have the same dog walker."

When residents feel these deep connections with service personnel, suddenly looking for a new home becomes much less about securing the best purely financial deal or other considerations. There are real attachments and relationships they are reluctant to leave behind.

Making the Right Choice
When thinking about providing lifestyle services to residents, it's critical that apartment communities choose services that residents will actually use, like those involving pet care, in-unit cleaning and upkeep and help with daily chores. High-end amenities like wine cellars may look good in marketing brochures and on property tours, but at the end of the day, residents use this benefit less than expected.

The battle to keep residents is getting tougher all the time. New communities and renovated properties keep raising the level of their onsite amenities to lure new residents and retain current ones. But when operators provide lifestyle services that residents use because the services address their everyday needs and concerns, operators will find themselves at a real advantage in the resident-retention game.