Despite everything the world has gone through in the past two years, one thing remains the same; the multifamily industry must continue to focus on resident retention. The financial benefits of attention to this specific KPI has demonstrable effects on operational excellence, vacancy loss reduction, and streamlining expenses.
At the beginning of the pandemic, multi-family resident retention was at an all-time high. Unfortunately, the months following the crisis created excessive move-outs as many residents moved in with family after losing their jobs. Fortunately, that’s turning around. According to Jay Parsons’s “Apartment Retention Rates Surge Back Near Lockdown-Era Peaks,” the number of residents renewing their leases in August 2021 climbed 4 percentage points year-over-year, the largest increase on record, bringing the overall retention rate to almost 58%. This comes close to the records set in April and May 2020.
What’s Driving the Increase in Multifamily Retention?
Parsons indicates apartment occupancy reached a high of 97% in August 2021, the highest level since 1994. As a result, supply is constrained. Consequently, many prospective renters either can’t find another place to live or they are looking at significant rent increases if they move. Renewing has become far more affordable than moving.
Lease trade-out is demonstrating an 18% increase for new renters, a trend shown in both single-family and multi-family rates. Lingering economic effects, coupled with 40-year record inflation is hampering renter movement in all but the most prosperous areas on the nation, aside from state-to-state financial exodus away from highly restricted economic conditions.
In short, multi-family owners and operators in many markets need to invest in residential retention strategies as rents continue to compete negatively against lagging wages and burgeoning economic stagnation.
The Cost of Losing Residents
RentPath reports that 60 percent of residents are planning to search for a different place to live within the next six months. One of the reasons for this is that many people are working from home permanently and have the luxury of choosing where they want to live. They are not tied down to living within a reasonable commute of an office.
An excellent summary of unit turn costs from Multi-Family Insiders breaks down the expense categories associated with turnover. While this data is dated, we can easily assume the costs are now well north of $5,000 per turn.
Of course, the numbers vary wildly across regions and asset strategies. Even with the low vacancy rate, it won’t guarantee your unit will be filled quickly. People may not be willing to pay the rent rate or perhaps inflation has demand constrained.
It is equally important to evaluate residents move-out reasons. The information will guide your retention marketing processes and provide insights to insulate against the challenge. RentPath states the three biggest reasons for moving: saving money, neighborhood safety, and proximity to family.
Of these, apartment owners and operators can influence safety, and to a degree, price (as none of us are immune to rising costs and must adjust rental rates for operational cash flow). While you cannot control crime levels in the neighborhood, you can take economical steps to ensure your community remains as safe and secure as possible.
The Need for Security in the Multifamily Industry
Many reports have shown that residents put a high priority on security; this is especially true for assets with family-oriented floorplans. A survey of 1,000 multifamily renters from Schlage and Wakefield Research shows that 61 percent of Gen Y want increased security. Baby Boomers and Gen Xers also rank high on security needs per the National Apartment Association.
An Assurant survey of renters confirms that over half will pay more for security features. This is especially true as hybrid and remote working have become permanent. Residents are more likely to renew if their personal security needs are met. Remote video surveillance helps create a safe space where they feel secure.
Multi-family residential property managers can retain more residents with security video surveillance. The savings gained from retaining residents will more than pay for the apartment security technology; additionally, adjustments to amenity fees can often offset the additional expense entirely, assuming courtesy officers, patrols, or guards are retained. In many cases, remote video monitoring of cameras, with escalations to the police, can replace guard and courtesy officer expenses entirely.
Finally, more seniors are selling their homes to move into multi-family properties to avoid the hassle of home upkeep. Video cameras are useful to ensure older residents have a safety net from typical age-related hazards, such as slip-and-falls or snatch-and-grab theft.
How Remote Video Surveillance Works in the Multifamily Industry
Implementing video surveillance with remote monitoring requires installing cameras in strategic locations around the property and perimeter, including parking areas. Trained monitoring operators and video analytics watch your property, and all recordings are saved for playback review. The presence of video cameras adds a layer of security and creates aversion for would-be miscreants.
If an intruder doesn’t notice the security cameras (or wears a mask), trained operators can deploy an on-site loudspeaker to issue a warning, then escalate to on-site guards or, in the event of immediate safety concerns or a crime in progress, call law enforcement.
While law enforcement is on its way to your property, the operator can track the suspect’s movements and keep police informed. Often, the police arrive and arrest the intruder before escaping. These actions often lead to the apprehension of the suspect before worse outcomes occur.
Video surveillance systems can save evidence for any incidents, crimes, or potential liability claims. For instance, a delivery person may submit a claim saying they got hurt on the property. Video analysts can search the video footage and review it to determine whether or not the person actually got hurt on the property.
Most traditional security technologies are reactive. They will not catch crime before or while it happens. Live remote video surveillance, on the other hand, is proactive security technology that can helps stop crime and minimizes damages.
The most effective video surveillance combines analytics with human monitoring operators who can help catch suspicious activity before it becomes a problem. The operator does not work alone, as analytic technologies help direct the monitoring operator to areas of interest quickly. The partnership between video analytics and trained monitoring operators helps maximize security.
Watch these videos from multifamily residential properties to see what remote video surveillance can do to help protect your residents and employees:
- Multiple apartment common area thefts
- Couple in an apartment parking lot
- Someone piggybacks into an apartment building
- How video surveillance handles vandalism and other scenarios
- What happens when a verbal altercation turns physical
Investing in Resident Retention
The cost of video surveillance with remote monitoring is surprisingly affordable. Many companies realize ROI within four months.
Every industry has unique security requirements, including multi-family. To find the right partner, make sure to contact video security companies with deep multi-family experience, as high-motion environments require specification. Stealth is at the top of this list.
When you work with our team of experts, you’ll receive personalized security plans for each of your properties. We will design a security system that meets your requirements and fits within available budget. Refer to this video surveillance checklist when looking for a solution that meets your needs. Remember, even if we don’t install your cameras, it is best to use a video monitoring company for your site plans over a camera installer. We are incentivized to deliver quality monitoring for strategic areas of concern, while camera providers are incentivized to sell cameras in volume.
Even within the apartment property industry, security requirements will not be the same for every multifamily residential building. Download your free Complete Guide to Securing Your Apartment Building to learn more or contact us.