Apartment firms invest big dollars on the best locations, new technologies, design features and amenities to fulfill their residents’ needs and wants. But new research shows that how these companies manage their communities may be a bigger factor in residents’ satisfaction and ultimate decision to renew their leases.
According to the National Multifamily Housing Council (NMHC) and Kingsley Associates 2020 Apartment Resident Preferences Report, management quality weighs heavily on resident lease and renewal decisions. In fact, seeking better management was the second most-cited reason respondents said they intended to move to a different apartment community when their current lease expired.
To better understand what makes for a good management experience, it’s important to look at some of the most critical resident touchpoints. These moments can ultimately make or break residents’ opinions of their community operators and drive their decisions to stay or go.
The 2020 Apartment Resident Preferences Report is the largest-ever collection of apartment resident insights, featuring input from nearly 373,000 renters living in 5,336 communities across the U.S. The report details the apartment features and community amenities that renters won’t rent without, how much they expect to pay for them and what matters during the apartment shopping process.
The Apartment Search
When ranking the top factors influencing their leasing decision, proximity to work or office was the leading response. However, No. 2 was the reputation of the owner/management company.
To that end, nearly three-quarters of respondents (72%) said they referenced ratings and review sites when thinking about renting at a specific community. More telling is that, of those who did, 85% said online ratings and reviews influenced their current leasing decision, for better or worse. In fact, 79% noted ratings and reviews stopped them from visiting a community.
These numbers tell us a community’s online reputation is imperative. More than half of respondents underscored this point by indicating that when visiting an apartment opinion site, they expect to see a response from management to all reviews — positive, negative or otherwise — demonstrating the importance of responsiveness, engagement and open communication from management.
While a positive online presence is important and virtual tools are helpful, they do not replace the need for in-person experiences and relationships. Despite the growing availability of virtual tours, 86% of apartment residents will not rent without seeing an apartment and 69% prefer a tour with a community representative. The ability to have questions answered was the top reason cited for this preference (98%).
Residents also offered insights on key community website features that would be useful in their search. The top five included: floor plans (93%), unit selection (90%), photos of apartment models and amenities (88%), community map (87%) and resident feedback ratings and reviews (87%). Of note, 71% said they would send text messages to management if it were an available feature. However, conducting a webchat with management was not as attractive (37%).
Once a resident has made a decision, the application and leasing process is the next step. An easy process makes a good first impression. In this area, the data suggests the industry is doing well, with 80% of respondents noting the online application and leasing process was “very easy” or “somewhat easy” and only 5% describing it as “somewhat hard” or “very hard.”
Maintaining positive communication with residents is an important factor in the leasing or renewal decision. Respondents shared their preferences for how and what to communicate.
When asked about preferred management communication method(s) for general information, residents overwhelmingly preferred email (92%), with text messages coming in as the second most popular option (32%). Residents reported that they are not interested in receiving information on social media sites, ranking this option last at 4%. When asked how often they would want to receive communication from management regarding non-emergency community information, the respondents were essentially split, with 42% reporting monthly and 41% reporting weekly.
Mobile access to important resident information and services also emerged as an important desire. The vast majority (81%) of respondents noted that the ability to access a resident portal from a mobile device was important or very important.
Residents also weighed in on which resident portal actions they would prefer to perform within a mobile app versus a property website via a laptop/desktop. By a large margin, residents preferred to perform all such actions within a mobile app. Examples include receiving package notifications (71% versus 12%), receiving notifications from management (65% versus 16%), submitting maintenance request (64% versus 17%), checking amenity status (63% versus 12%), contacting management (60% versus 17%), paying rent (58% versus 23%), reserving community facilities (56% versus 16%) and renewing the lease (46% versus 29%).
Technology also comes into play regarding rent. Very few respondents want to pay by paper check (7%). Instead, respondents preferred using a debit card without a convenience fee (36%), a credit card without a convenience fee (24%), an app-based payment such as Paypal, Apple Pay or Venmo (12%), or had no preference as long as it is automated (21%).
The Lease Renewal
When asked how they would prefer to receive lease-specific information from management, respondents again chose email as the primary preference (89%), followed by text message (22%). Respondents also noted a preference for an electronic (61%) versus in-person (21%) lease renewal process and paperwork.
Of those surveyed, 41% reported that they plan to renew the lease on their current apartment. Of those who don’t plan to renew, about a third say they expect to move to another apartment community.
Aside from wanting lower rent, residents’ most cited reason for moving was seeking better management. Forty-seven percent of respondents noted that lower rent was their top reason for moving to a different community. However, nearly one-third of residents said they would move to seek better management, outranking other significant considerations including better apartment features and community amenities, better floorplans, more space and even a better location.
Given this data and insight, there are clearly things that are challenging the cardinal rule in real estate. For as much as “location, location, location” is critical, apartment residents do not overlook the importance of “management, management, management.”