How to renew more residents, project occupancy, and navigate uncertainty – Renewal Series, Part 1
How do you project future rent trends with the pandemic’s anomaly influence on the multifamily industry? Can you properly budget for your future turn expenses and maintenance costs associated with turnover without a clear picture or access to the soon vacant unit? Delinquencies nationwide are higher than typical and recapturing funds is important, but other conversations will support future planning efforts if navigated with intent. Below we will uncover some other components of how renewal follow up strategy can help reveal a more accurate forecast amid pandemic imposed uncertainty.
120 – 90 days in advance, renewal offers are sent to current residents. Offers are generated by market rent suggestions based on market survey rent reporting statistics, technology driven, or by hand. Whatever the case may be, those offers generated and sent in early February are a great way to drive residents away from your community and increase move outs. So, how can you navigate the unexpected downturn and preserve your property from plummeting in occupancy? Renewal follow up strategy is the answer. Strategic action is the way to future stability, and it starts with the residents you already have.
ACTION 1: “Save” residents on notice-to-vacate
Without urgency, nothing will come from the act of saving notices. Urgency as represented here is not outward, it’s inward, and the intention behind the effort. Every day you wait that resident is looking for a home. Start now and work backwards listing all residents on notice in good standing and delinquent, and identify the “keepers”. Targeting the less risky renewals in good standing is the priority.
Set goals and work towards them.
How many do you think you can save? Now, add 20%-30% and set the bar high. Know your competition’s standing and develop some ideas on negotiations that could help seal the deal. Go to the respective person who would grant approval of your negotiation presenting the goal and how you intend to get there. See what negotiation tools you can use at your discretion. People act on emotion and change their mind, so time doesn’t work in favor of these efforts. Once you have that “Yes”, send the lease instantly for execution and follow up within 24 hours. Maybe put a time limit on negotiation offers for an “act now” influence to create urgency. Then close it as fast as possible.
If they don’t cancel, get details.
If they don’t cancel the notice, ask them why? Get specific but don’t get defensive. Listen, but also find ways to sell the future today. Empathize, and overcome objections with a solution to concerns. Finally, if they go anywhere else find out how you could improve things for other residents. Getting the most out of a resident who has given notice to live somewhere else lies in the questions you ask, then in how you respond. If you know your market and your property weaknesses and shortcomings, you can develop ways to offer solutions as a response to others.
ACTION 2: The pre-pandemic “Yes” who still hasn’t signed the renewal
Calling the “Yes, we want to renew we just haven’t signed our renewal” residents requires the same level of urgency used when saving the notice-to-vacates. They could be shopping around! Prepare any re-negotiations or incentives before picking up the phone. Knowing what tools are available eliminates delay that will give renewing residents time to change their mind.
If they aren’t sure if they want to renew, take the same approach in trying to get a resident who already gave notice to stay. Ask the leading questions, listen, and use any negotiation tools you have to win them over. Once they sound the slightest bit engaged, set expectations for your next actions with narrow timeframes, but come across as concerned, not pushy.
What if they now aren’t sure about renewing or have a past due balance?
What if they are now delinquent on rent because they lost their job? There is a difference between a hardship imposed by pandemic, and one imposed by habitual late rent. The clues to the cause lie in the payment history. If a resident has been in their home for over 6-8 months with only one late payment, it’s possible the pandemic has cost them their job.
Management companies who are willing to consider an alternative to the conventional best practices in pre-pandemic times will be more likely to save on the cost of turning the unit and finding a new lease later. An example of non-conventional in this case? Trial utilizing shorter terms, or month-to-month can minimize the risk if things don’t improve soon and minimize the chance of being stuck with a non-paying resident.
What ideas can you generate?
There is no doubt that the pandemic imposed economic shifts were unexpected. For multifamily and many other industries, outside the box strategies are crucial to preparing for the next wave of uncertainty. Stay ahead navigating the current climate and have a plan.
We hope you look forward to our next chapters in renewal strategies, which will include articles on delinquency strategy, maintenance turnkey scheduling and realistic spend forecasts.