For Operators, Resident Retention Is an NOI Strategy
It can have a bigger effect on property performance than many owners realize.
Rising operating costs, increased housing supply and choosier renters with more options have made the economics of resident retention more compelling. Every lease renewal helps operators avoid the expense of marketing a vacant apartment, preparing it for a new resident and absorbing potential downtime between leases.
In many cases, keeping an existing resident can deliver a stronger financial return than pursuing a new one at a higher rent. According to Zego, which has tracked turnover costs since 2021, these costs hover around $4,000 per resident each year.
The National Apartment Association has concluded that for a standard 225-unit building with a typical 40 percent turnover rate, apartment turns costs the property over $160,000 annually. Reducing that turnover by just one unit per month can save an operator more than $20,000 a year.
Multi-Housing News asked apartment operators how they’re approaching retention and where the biggest challenges remain.
Residents who feel heard
Operators agree that resident experience, communication and service delivery are closely connected priorities that support retention. RPM Living recently launched RPM Listens, its proprietary platform that proactively engages residents throughout their journey by regularly requesting feedback.
“RPM Listens allows our teams to identify opportunities (for improvement) and address concerns in real time rather than waiting until renewal or move-out,” said Catherine Behringer, vice president of operations, RPM Living.
It’s still too soon to quantify RPM Listens’ direct revenue impact, but the experience metrics are being tracked and they’re highlighting leading indicators of resident retention, which is strongly tied to NOI, said Erin Nielsen, vice president of customer strategy at RPM Living. The company expects to see the impact to eventually show up retention and operating performance.
Getting ahead of problems
Atlas Real Estate defines the resident experience as the result of consistent communication and reliable service delivery, not something layered on top, according to Roberto Martinez, vice president of Atlas Home Services, part of Atlas Real Estate. “When residents feel informed and supported, they renew, they take care of the home and they tell friends about it.”
Atlas Home Services is building a proactive resident journey, not a reactive one. This means fast maintenance response, clear communication through every stage of the lease and technology that removes friction instead of adding it. Martinez recommended, “Retention isn’t won with an amenity or a gift card. It’s earned in the day-to-day experience residents have with our teams.”
Martinez adds that renter expectations have shifted. “People expect the same convenience and transparency from us that they get from any other service they use. Meanwhile, costs haven’t gotten easier to manage. We’ve always bet on operational excellence, but we’ve gotten sharper about using data to get ahead of problems.”
Atlas Home Services is investing in predictive analytics, standardized processes and tools that give teams better visibility into what residents need, so they spend less time on admin and more time building relationships.
According to Martinez, renewal prediction models are useful, but they’re not a replacement for actually knowing the resident. “The models are best used to flag trends and prioritize outreach. They can tell you who’s at risk of leaving. They can’t always tell you why,” explained Martinez who thinks the best results come from pairing that data with the things on-site teams know about the property and the people living there.
“Technology gets us ahead of the problem; relationships are still what closes it,” said Martinez.
Keep service human
What matters most to residents and employees? According to Melanie French, CEO of RR Living, it’s reliability, value, respect, trust and communication. She noted those are the five highest unspoken needs that you can carry across every company, every apartment community, every department and every interaction.
“Think about it,” said French. “We offer homes. People live and raise families in these homes. They often experience their most vulnerable moments in these homes. We are paid to provide them with a place where they can be themselves, enjoy the amenities, share their joy and meet their newest friends who happen to be their neighbors.”
AI has totally changed the game. But French cautioned that owners and managers must be aware that AI tools become an extension of the community team and can affect brand (perception) just as humans do. “If your residents only have touchpoints with your AI agents, then that agent becomes the employee who works there.”
Learning from non-renewals
When the RR Living team receives a notice to vacate, the first step is to ask why. At that point, it’s important to listen to the resident. Conversations often help the team uncover valuable insights to identify trends, improve processes and make meaningful operational adjustments.
“Every non-renewal teaches us something. We’re not chasing 100 percent retention. We’re chasing continuous improvement and communities where people actually want to stay,” said Martinez.
