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Zillow and The National Association of Realtors estimate first-time home buyers will regain market share by 2025. Fannie Mae's forecast says that the 30-year fixed rate will be 6.79% in 2024 and 5.72% in 2025.In the latest Biennial Online Renter Study published by SatisFacts Research, sense of community remains the #1 driver for the perception of value at 3.93 (on a scale of 1 to 5; with 5 being the most important). However when renter ...

Brent Williams Ok, I have to apologize in advance for the rant!

I think those of us who are passionate about building a sense of community have failed in many ways to effectively "sell" our vision. The reality is that when rents are rising, turnover is seen as a good thing to many in our industry, as that helps push rents. And those that push for a sense of community have a much harder, nuanced "sale" to leadership even though we really can have it both ways. If we boost a sense of community, then that means we not only have less turnover, but those renewal prices can be pushed higher, as well, because people will pay more for an experience that they are in love with. That means less turnover cost AND higher rents. Plus, the higher retention lowers availability and supply, which then allows us to be more aggressive on new rents, as well. Economically, I have to imagine that a strong sense of community ends up being more profitable on three separate fronts. But if you look at technology adoption, as an... Show more

Ok, I have to apologize in advance for the rant!

I think those of us who are passionate about building a sense of community have failed in many ways to effectively "sell" our vision.  The reality is that when rents are rising, turnover is seen as a good thing to many in our industry, as that helps push rents.  And those that push for a sense of community have a much harder, nuanced "sale" to leadership even though we really can have it both ways.  If we boost a sense of community, then that means we not only have less turnover, but those renewal prices can be pushed higher, as well, because people will pay more for an experience that they are in love with.  That means less turnover cost AND higher rents.  Plus, the higher retention lowers availability and supply, which then allows us to be more aggressive on new rents, as well.  Economically, I have to imagine that a strong sense of community ends up being more profitable on three separate fronts.  But if you look at technology adoption, as an example, which category served to lead the way?  Marketing and Leasing.  Our organizations also often echo that approach, where there is a much higher chance that there is a "Marketing Director" than there is a "Retention Director".  In fact, I would guess that retention falls under the marketing umbrella for most companies.  I feel we sabotage our efforts on this front in so many ways.  Anyway, I'll jump off my soapbox now - sorry!

Jessica Pope Oh, I love this rant - the accuracy! And it's not just less turnover, but how much do they increase the rent vs the cost of the turn (paint, new fixtures, potential new carpet, maintenance hours, etc). It all adds up and takes from that higher rent from the new renter. An article that just came out in GlobeSt. discussed that there is a rise in supply and that concessions are plentiful, a trend likely to continue. So if we factor in turnover cost + likelihood of concession, we're probably losing money vs keeping a happy resident (with a potential increase in rent) + potential referrals (ie new renters) + positive reviews (ie good reputation which increases leads). To me it's a no brainer. But by not showing (and connecting) the value, likelihood to renew decreases and then they lose out on renewals as well.

Vicki Sharp Allow me to jump on Brent and Jessica's bandwagon here. One thing that I have never understood is the commission plan that pays more for new leases than it does for renewals. Basically, we are sending a message that we prefer new leases over keeping great residents. Given how much turnover costs the property, it's just silly to waste that money. Average how much you spent and lost in turnover costs in 2023 and divide it by the number of move outs. I am willing to bet you spent/lost more than $3000 per unit! Take half that amount and make that your new renewal bonus. Split this money between all involved in taking care of residents. For example, $1500 renewal bonus to be split 20% to manager, 20% to maintenance supervisor, 60% split among all remaining team members. When you have a hefty renewal bonus split among all team members, you will see your resident review skyrocket, and your turnover rates fall.

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