Resident Retention: Ideas, Tips, and Insights from Property Management Pros

Resident retention ideas help reduce turnover in leased properties, a critical key performance indicator (KPI) every property manager pays attention to. 

But the property managers we’ve consulted have told us something interesting. Merely rolling out the traditional “resident retention” playbook no longer cuts it..Why? These legacy strategies are too reactive and far too basic. They were created to “save” a resident in the last few months of their lease. 

Instead, in today’s world, modern property managers need to be focused on proactively delighting residents the second they sign. If they do this, then high resident retention rates will follow.

Here are some of the best, forward-thinking trends we’ve seen for resident retention in the property management industry.

Related: State of Resident Experience Study

What is resident retention, and why is it important?

Resident retention is a key part of achieving a Triple Win in property management, whether it’s in single-family (our focus) or multifamily. In transactional terms, the ultimate goal of a resident retention strategy is to increase lease renewal and reduce resident turnover, which results in lower costs and less work for property management teams. 

However, a Triple Win mindset levels this up by asking, “How can we create experiences so good that residents never want to leave?” Resident satisfaction, in turn, maximizes the investor’s ROI and boosts the property manager’s success. A win for residents is a win for investors is a win for property managers. 

This mindset moves from approaching property management as a list of menial tasks into a more generative and entrepreneurial approach. You’re in the driver’s seat as the property manager, and you can create programs and solutions that residents will pay and stay for. 

Now, you might be wondering why property managers should pay attention to resident retention rates. Here’s what Melissa has to say about that:

Melissa: “Resident retention is a direct reflection of your customer experience. If people enjoy working with you, they'll stay. If they don't, they won't. Due to rising costs for investor clients, rent rates are climbing to keep up with those costs – which can be a big objection to overcome with residents.

Swallowing the pill of a $150-$200 increase in rent can be tough for a resident on a fixed income. That makes their experience with us even more important. If they don't enjoy the experience, they most certainly won't agree to that level of rent increase.”

What residents are saying about lease renewing and retention?

In a recent survey by Buildium, only 32% of single-family rental (SFR) residents said they were certain they’d renew their lease this year, and an additional 36% were on the fence. This means that more residents have a desire to move than we’ve seen historically.

Why is that? A couple reasons…

• 22% said they planned to move to a rental with more appealing amenities or benefits. 
• 13% said they planned to move because they weren’t happy with the experience at their current rental. 

That’s a huge chunk of residents whose main reason to leave is a lack of benefits they want or need. 

What is a good resident retention rate in property management?

Calculating resident retention rates and factors that can affect this rate can be challenging, as well as what’s considered a good average retention rate. Melissa sheds some light on this:

Melissa: “We look at leases ending as an opportunity, and our resident retention is how many of those leases ending in a calendar year we convert to extend their lease term.

Executed / Opportunities = Renewal Rate.

A good average retention rate is anything 70% or better. That number has been our benchmark for success for 17 years of business.

Factors that impact retention include how much owners are involved in setting rent rates, the housing market, the rental market, demand, experience, etc. We haven’t seen retention rates vary significantly by location, such as states vs. cities vs. rural areas.”

Property managers share their best resident retention strategies

The Buildium survey findings align with what many property managers are telling us, too. In fact, professional PMs tell us that a Resident Benefits Package is a powerful way to retain residents over the long term. RBPs can help with resident satisfaction and resident retention rates. After all, a proactive, differentiating approach to resident retention means building experiences that people will pay and stay for. 

Melissa: “Residents who stay longer-term tend to make on-time payments more often, take better care of the home, and reduce vacancy costs/leasing burdens. 

These benefits lead to better rent collection and increased management fee collection, happier clients with lower turn costs, and a lower market-to-move-in or days-on-market metric for leasing because their inventory continues to be reasonable and controlled.” 

In multifamily property management, resident retention strategies often center around resident events and building a sense of community. They may try things like holiday parties, happy hours, movie nights, and other get-togethers.

But in single-family property management, where your properties are likely very different and spread across a larger region, the strategies aren't always as straightforward.

Here are the top strategies that professional PMs are talking about right now. These help with bringing in new residents and with retaining good residents.

Build easy communication with residents

Relationship building is an important part of resident retention, and the foundation of any good relationship is, as any dating advice will tell you, communication. 

The rise of digital apps, online portals, messaging services, and social media platforms has made it easier than ever to communicate. Studies show that text messaging is on the rise, and most single-family rental (SFR) residents prefer text to other communication channels. Here’s how one study found the breakdown of where residents are communicating the most.

• 49% are using text
• 43% are using email
• 41% are using a phone

PMs also know that expeditiousness is key. If residents are attempting to contact you, they likely have an issue that needs resolution asap. That’s why strategic PMs leverage technology and services that are all about speed.. More PMCs are incorporating solutions like texting, ticketing/inbox, offshore or outsourced staffing, and automation to remain quick-to-reply.

Another great communication channel is sending surveys to current residents on a quarterly basis. Professional PMs ask what could be improvedand use the data collected as a source for additional resident retention ideas. At Second Nature, we allow residents to survey and give feedback in their rewards app, and even incentivize it. When you are proactively seeking feedback, you can more easily drive positive social reviews and reputation management.

Invest resources in property maintenance

Anyone can tell you that property maintenance management is critical to a positive resident experience. 

But sometimes newer property managers only know how to take a reactive approach. They might do an annual inspection or respond to complaints. But they may not be proactively developing strategies to improve the property for themselves and their residents. 

In contrast, seasoned property management companies approach maintenance with a benefits-focused mindset. Instead of reacting to property problems, enterprising PMs tend to ask, “What habits can I encourage in residents to help keep the property in tip-top shape and therefore avoid maintenance requests altogether?”

First, by creating care and value, PMs encourage residents to care for and value the property. But beyond that, PMs can implement strategies that make those behaviors easy. 

For example, a Resident Benefits Package can include air filter subscriptionsand pest control services – all of which help support residents in maintaining and nurturing the property. After all, it’s easy to change your air filters on time when they show up on your doorstep.

We’ve seen a trend of property managers developing proactive strategies that help residents take care of the property. It pays off in dividends. 

Provide a simple, rewarding payment portal

Speaking of paying off, most property management companies now offer online payments to residents. It’s true: 73% of residents say they prefer a digital method for payment. That’s the first step. But PMs have told us that many of those legacy payment systems can be difficult to use or don’t actively support residents in making timely payments. 

The next step is to ensure you’ve set residents up for success in making on-time payments. Some PMs set up rewards systems or incentives for on-time payments. These programs can help reduce the amount of time you spend following up on rent. 

For example, Second Nature’s Resident Benefits Package has a built-in credit-building service that reports on-time rent payments to all three major credit reporting bureaus: Equifax, Experian, and TransUnion. We’ve helped residents increase their scores by as much as 40+ points. You can bet that if residents have the option to boost their credit score, they’re more motivated to pay on time.

Focus on resident security

Creating safe spaces to live in helps protect both the residents and the properties that you manage. Making it clear that safety is a priority is also an effective way to build a reputation as a property management company that cares. 

Property managers can emphasize the safety of single-family homes through standard practices like ensuring rental properties have flood lights, working smoke detectors, carbon monoxide alarms, and solid locks changed after each move-out or before move-in. Surveys can also help assess how safe residents feel in their homes and if your company can do anything to improve security. Regular inspections and good communication go a long way to maintaining excellent security. 

For a Triple Win, property management companies can also provide an Identity Protection benefit . The odds of falling victim to online crime is 1-in-4. A $1M coverage provides real protection and peace of mind for residents while they get their personal data restored.

Adopt new technology

Technology brings ease and automation to every element of property management – and every individual involved. In fact, 79% of SFR residents prefer to complete at least some rental processes online. 

Technology helps you deliver competitive features without breaking the bank or slowing you down. And it gives ease and convenience to residents, too. These days, property managers have digital solutions for basically every part of their job, including:

• Online payments
• Maintenance request tracking
• Online rental listings & applications
• Text and email communication
• Renters insurance programs
• Resident screening
• Document signing, sharing, and storage

Using SMS messaging platforms, online rent payment systems, and resident portals adds more efficiency for property managers while offering convenience to residents. 

The ability to pay rent, make a property maintenance request, or register a new pet or vehicle online creates a seamless experience that the resident can manage independently on their own time while also creating an organized system for leasing agents to respond to those requests. No more scribbling a repair request on a sticky note—now you can automate everything. It’s the best option for everyone involved.

Be proactive

The best PMs are always aggressive. They visit each property at least once each year, not just when something goes wrong. They have automated systems in place to alert them when new needs pop up. They design or invest in benefits packages and perks to serve their residents and stand out from the crowd.

In “The 7 Habits of Highly Effective People,” Dr. Stephen Covey’s second habit is, “Begin with the end in mind.” Professional property managers who are ready for the future proactively identify opportunities to improve the resident experience. 

Ask things like: “What can I do this coming year to improve the living experience for my residents?” Maybe that’s new programs, new roles on the team, new technology, etc. 

Whatever creates value for residents is worth an investment because the payoff lasts. 

Melissa: “The best advice I can give is this: Communication and expectations are KEY. Start to work for the renewal on Day 1 of the original lease term, and consider how you can increase your communications. Be transparent. Be open to feedback. 

See retention as a bottom-line revenue driver. See retention as a benchmark for how residents are experiencing your company. Set a budget for creative incentives, and then encourage your team to USE THAT MONEY UP! The more "dopamine hits" you can give for those feel-good connection moments, the better! 

I think creativity is understated in property management. We focus so much on difficult interactions. How can we increase the positive ones? Who doesn't love to feel celebrated, seen, valued, appreciated, and considered? Reach out early and often!

We start reaching out to residents six months before their lease expires. Make the reason for that initial touch point to "check in" – because it’s about relationships!

People like to feel valued. 

Get creative with incentives for long-term leases! We offer all kinds of crazy resident incentives. We even bought a resident their very own bounce house when the client's homeowners insurance made the resident remove their large trampoline. Identify the real roadblock or concern, and do everything in your power to listen and solve it.

Listen to any real complaints. If there are maintenance issues, solve them. If there are communication concerns, address them. Residents want to know that when they voice a real concern, you hear them and work hard to partner with them to fix it!”

Automate what you can as you grow

As property management companies grow, it becomes harder to dedicate individual time to each one of your residents. Property managers must figure out a way to maintain this resident expectation though.

One effective strategy is to utilize technology to streamline operations and foster stronger relationships with residents.

Melissa: “Automation is key as you scale your business. We manage around 5,000 doors, and without the ability to send email and text blasts, etc., we'd struggle to achieve the high touchpoint mentality we have. 

I think the larger your business, the more important these tools become. You can only grow at the pace at which your business can efficiently scale without having to continually add more staff. 

Text Magic is a low-cost solution for texting, and Callfire is a great option for mass-dialing and automated phone messaging. Any PM software has great reporting capability to build out mail merge lists. It doesn't have to be expensive to make it happen!”

For all of the above, Invest in a Resident Benefits Package

As we’ve seen, resident benefits packages are the best way to build these experiences and perks that residents want. Benefits packages are bundled services that help drive revenue for your investor and drive satisfaction for your residents. 

At Second Nature, we offer services in a custom resident benefits package (RBP) designed by you and managed by us. We developed and designed each pillar of the RBP based on pain points that property managers shared with us – turning those pain points into benefits.

These services include supports like:

• Routine air filter delivery: This is a cornerstone of our benefits package because one of the most common causes of HVAC maintenance requests is a failure to change air filters on time. PMs who have implemented air filter delivery have seen a total reduction of 38% in HVAC requests.

• $1 million identity theft protection: Our benefits package includes identity fraud alerts and protection. Your residents can rest easy knowing every adult on the lease has coverage.

• Credit building: As we’ve mentioned, we report on-time payments to the credit bureaus so your residents can automatically boost their credit scores just by paying rent on time. 

• Rental rewards: People love rewards! We include the cost of rental rewards in our total package, so PMs don’t pay more. We include perks like gift cards to local businesses, restaurant cards, cash rewards, and more.

• Move-in concierge: The first thing most residents do on move-in is make several calls to set up utilities. With our move-in concierge service, residents turn four phone calls into one. They don’t have to contact utility companies; we do it for them and identify the best rates. 

• Renters Insurance Program: Our benefits package includes price-competitive insurance options to apply to all residents – at one group rate. 

A benefits package puts PMs ahead of the game, proactively building the environment residents pay and stay for.

How 1,800+ professional management companies create Triple Win experiences

Resident retention is far more than a transactional arrangement. We know that a high percentage of residents leave when they aren’t getting benefits they could get elsewhere. 

Forward-thinking property managers take a proactive approach to resident retention by developing experiences that residents are looking for. By creating a fantastic resident experience through offering benefits and support, property managers drive a triple win for residents, investors, and themselves. Higher retention can drive referrals to prospective residents and clients, too.

Offering a resident benefits package that adds value to the leasing and living experience of your residents is as easy as Second Nature.