5 Ways to Strengthen Your Lease Renewal Strategy
Co-authored by Tim McInerney
To maintain occupancy and preserve revenue year after year, you need to remove any friction around your renewal process for both your teams and residents. Limited technology and a lack of automation can make the renewal process frustrating and time-consuming for your team, and result in a poor customer experience. No matter what market conditions look like, it’s important to make sure you have the right strategies and tools in place to keep renewals high. Here are 5 ways you can support your residents, while strengthening your retention strategy:
1. Provide Flexible Lease Terms
Committing to a 12-month lease may seem like a high risk to some residents. One way you can accommodate their needs is to offer flexible lease terms, such as 6-month or 4-month leases, or allowing them to temporarily renew month-to-month. That way instead of losing a potential renewal during a market with less demand, you can let them renew as they normally would after a few months. For other residents, longer, 24-month leases set at a fixed rate may be more appealing. If you give a range of options to choose from, you can increase the chances your residents will renew and provide peace of mind for both parties.
Implementing a software system that has a variety of term and rent combinations built-in, like AppFolio Property Manager, can make it easier for you to create flexible lease renewals. It can also reduce the back and forth negotiations by giving options to select up front. For instance, with AppFolio’s Multiple-Term Offers, residents can choose from up to five different options and select the offer that best fits their needs.
2. Consider Flat Renewals
While it may seem like a good idea to increase rents for every renewal offer, it’s not always the right approach, depending on current market conditions. If residents move out because they can’t afford the higher price, then you will be back to square one when it comes to maintaining occupancy, and you’ll also incur vacancy and turn costs. By holding off on rent increases (temporarily) and offering a flat renewal when the market contracts, you can show your residents you care and earn more renewals.
It’s understandable if you are hesitant to disrupt your lease expiration management schedule or open your business up to potential risks by offering different lease terms than you typically would. However, being creative with lease terms to keep residents from churning can actually ensure stability in the short term and mitigate future risk.
3. Bring Renewals to the Renter
From grocery shopping to paying bills, today’s residents prefer to carry out the majority of tasks online, and that includes renewing their lease. Mobile technology can allow your residents to quickly and efficiently sign their lease renewal from anywhere, on any device. Not only is this more convenient for both parties, but it takes the headache out of the renewal process and increases resident satisfaction. For property managers using Blue Moon renewal forms, AppFolio’s integration makes it easy to select, send, track, and countersign lease renewals right within the Online Portal in just a few clicks.
4. Reach Out to Your Residents
In a service-oriented industry, like property management, your teams develop relationships with your residents and oftentimes are in a position to provide the support they need. When residents feel well cared for and valued, they will be more likely to renew their lease and stick around for the long-term.
One of the best ways to get a pulse on how your residents are doing is to proactively reach out to them. Ask your residents how they would prefer to communicate — whether via text, email, or phone — and be sure to check-in throughout the year. For those with renewals coming up, touch base sooner rather than later to get a better sense of what they need and how you can make them feel more comfortable renewing. Not only will residents appreciate the communication with your team, but they will know their plan is good for your business.
Using technology features, like AppFolio’s Renewal Notice Letters, can save you time by allowing you to digitally inform residents of their upcoming renewal and any related rent increase. You can even set default letter templates per property and automatically insert fields, like renewal options, renter information, and more. In addition, you can increase visibility and follow-through by setting a deadline for the resident to respond within their Online Portal, which will automatically trigger a reminder email 7 days prior to the renewal date.
5. Use Data to Your Advantage
When you understand how your properties are performing, you can develop a plan of action to optimize your renewal strategy. Consider implementing technology that collects and analyzes all of your data to free up your team and make it easier to understand your renewal performance. Features such as AppFolio’s Renewal Summary Report, can streamline the process by creating a single, filterable view with all renewal offers extended and resident selection over a period of time, so you can access the insights you need to make more strategic decisions.
Keeping your renewals consistent requires flexibility, efficiency, and planning. When you give your residents options, like multiple-term offers, and use automation to facilitate the process, you can increase the likelihood they will renew their lease and stay in your community.
By implementing technology that reduces friction, you can save time, improve your tracking capability, and provide a better experience for both your team and your residents. To learn more about how you can enhance your customer experience, take a look at our free guide below.