Many multifamily community residents today come from Generation Z who are known for being the first generation of digital natives. Thus, it’s logical for property managers and owners to bet on technology and invest in it. However, the 2024 Resident Experience Management Report tells a different story. The report is based on feedback from more than 600 multifamily residential property managers and more than 1,000 residents.
Due to a record-breaking number of apartments and other multifamily residential properties coming on the market, residents have more options. They are finding a comparable place to live that’s more affordable and taking advantage of it.
Another notable thing the survey has found is that turnover costs $4,000 per unit. The costs come from cleanup, repairs, marketing, and time of vacancy. Therefore, property managers and owners need to focus on a strong multifamily residential retention strategy as it’s the most profitable way to manage a property. It turns out that properties with higher retention rates run into fewer delinquencies.
What Do Multifamily Residential Residents Want?
The survey shows a growing number of property managers are more focused on resident retention goals. However, they’re struggling to achieve them. The survey finds that property managers believe retention is going well. Yet, up to 40% of residents have plans to move. Moreover, property managers think resident expectations continue climbing, but residents say this isn’t the case.
Perhaps, the biggest reason is that property managers fail to understand and predict what residents want and need. This is apparent as property managers think residents don’t renew because of life changes or buying a home. Because of this, they believe they do not have control over resident turnover.
What do residents list as the main reason for moving? It’s to find a place with lower rent. The cost of rent as the reason for moving didn’t crack the top 12 responses from property managers.
In reality, property management has more control over preventing resident turnover based on the top five reasons for residents leaving. The good news is that residents do not base their choice of home on pricing alone. The survey says they will stay if they have a “pleasant living experience.”
The top cited reasons for renewing a lease are as follows:
- Rent is too expensive
- Concerns about safety
- Poor maintenance service
- Poor property upkeep
- Poor management communication and responsiveness
Property managers can control all these reasons. While rent is based on multiple factors, they can be flexible and get creative in retaining residents. Community security and maintenance repairs scored highest at 46% and 47% respectively.
What Technologies Do Multifamily Residential Residents Want?
While technology didn’t break the top three on the list of residents’ priorities, technology still matters. It’s just not the highest priority or the only thing residents look at when searching for their next place to call home.
It’s a given that residents want a strong Internet connection to manage all their networking and computing needs. But there’s more to technology than networking. Property management is not attuned to residents’ needs in comparing the list of where resident expectations have climbed the most.
Here are what property management thinks residents’ expectations have increased most:
- Customer service from on-site staff / Updated units (tie)
- In-unit technology
- Community technology
- Digital self-service options
- Amenities
On the flip side, here are the residents’ highest expectations:
- Digital self-service options
- Package delivery system
- Customer service from on-site staff
- Updated units
- Flexibility for lease terms or payment schedules / Community technology (tie)
While the two lists share a few items in common, the levels of priorities are different. Residents want digital self-service options. Yet, more than half of the property managers do not offer a mobile community app. Residents want to use a mobile app and digital self-service for routine tasks like making payments, maintenance request management, problem reporting, and lease renewals.
They still value interactions with property management staff for higher-stakes activities. In short, there’s a big mismatch between the priorities of property management and residents.
What Can Multifamily Residential Properties Do to Retain Residents?
The first thing property management and owners need to do is understand what residents want. Again, the top aspects of the residential experience are things that property managers and owners can control.
Consider one of the top complaints is poor maintenance repair service. Creating a digital reporting process can help overcome this. A mobile app and web-based app can make it easier for residents to report maintenance issues and track the updates. Property management must figure out a way to ensure the reports get addressed in a timely manner.
The report emphasizes residents highly value a maintenance-free lifestyle. In fact, the report references the NMHC Grace Hill Renter Preferences Survey in which residents have selected “maintenance-free living” as the most important benefit of renting. Some residents have opted to sell their homes for this reason.
Property management thinks residents want amenities like pools, concierge services, and smart technology. However, “boring” offerings like security and a well-maintained community are more important.
Digital apps can also alleviate staffing challenges. A report from Appfolio in the National Apartment Association contains input from almost 5,000 employees who work for property management companies. Hiring new employees was one of the top challenges.
Additionally, the Institute of Real Estate Management shows multifamily residential industry turnover is 33%. The national average of turnovers is 22%. The standard turnover rate target is 10%. Anything higher than 25% is concerning. It’s worth creating an employee retention strategy because it leads to lower resident turnover.
A property management company that has a standard 10% employee turnover will only experience 3% resident turnover according to Multifamily Insiders. In other words, lower staff turnover leads to lower resident turnover. With the industry’s turnover rate at 33%, a little math shows that leads to a 10% resident turnover rate.
Appfolio’s Stacy Holden tells Multifamily Dive that about 40% of the work employees do is busy work. Therefore, automating repetitive tasks allows employees to focus on customer service from on-site staff. Many of the routine resident management tasks can easily be managed with a digital self-service app or tool.
While investing in technology comes with a price tag, the return on investment can positively affect the net operating income. Digitizing rent payments and security deposits allows the property to be paid faster and prevents errors with manual management where payment arrives late or goes missing.
Here’s a cautionary note. Don’t invest in technology for the sake of technology. It needs to be intentional and work with the property management’s existing systems and processes. Obviously, some processes will be tweaked to be more efficient as automation takes on some of the load.
What Security Helps Multifamily Residential Secure Properties?
Multifamily residential property management is responsible for creating and maintaining a safe community for residents, employees, visitors, vendors, and delivery personnel. As the survey shows, security is a must-have for residents. It should not be treated like an amenity.
Investing in and promoting the security of multifamily resident property can go far in attracting and retaining residents. At the same time, a good security solution can increase net operating income.
It’s essential to select the right security technology. The wrong one can increase net operating income (NOI) and overhead. The most effective security system is video surveillance with remote monitoring services and an access control system. It’s a proactive security solution.
Furthermore, it’s possible to centralize security with an integrated security solution, so the security functions are managed in one place by security professionals. Staff should not be managing security. Fortunately, video surveillance and monitoring can be more affordable than a full-time employee.
An integrated security solution with an access control system, video surveillance, and monitoring simplifies security management. It can also simplify video management and the video search process
It’s vital to have remote monitoring services. This is where artificial intelligence and human monitoring operators work together to watch over the multifamily residential property. They do it from another location. Artificial intelligence and monitoring operators can help catch potential problems before anything happens. This turns video cameras into a proactive security solution.
This security solution does more than help residents feel secure. It can track maintenance activities and property upkeep. This way any blight can be addressed quickly before it spirals. The integrated security system can help identify operational improvements.
Video surveillance can also protect property owners from apartment liability lawsuits. Any injuries and accidents that happen in the apartment or multifamily residential community can open a liability claim. Security cameras and video recordings surveillance help defray the cost of a liability lawsuit.
To get started, use this list of questions to ask a security company. The right integrated security solution, like the one from Stealth Monitoring, can yield a return on investment within months. It has the potential to increase net operating income.
In selecting Stealth Monitoring as your multifamily residential property’s security partner, you’ll work with security professionals who have proven experience securing multifamily residential buildings. Just check out the hundreds of multifamily residential videos on Stealth’s website.
To find out more about Stealth’s integrated solutions, check out the Complete Guide to Securing Your Multifamily Residential Building. If have questions, please contact us.
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