Top Renewal Strategies in 20 Minutes.pptx
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The nationwide average cost to a property management company for every resident that leaves is about $3,900. Resident retention should be your number one priority, especially during leasing season since it has a major impact on your cash flow. We know you’re busy, so join us for a quick 20-minute session to find out how you can remove friction around the renewal process and incentivize residents to stay with you year-after-year.
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Top Renewal Strategies in 20 Minutes.pptx
- 1. 1 2022 © AppFolio, Inc. Confidential The webinar will begin shortly…
- 2. 2 2022 © AppFolio, Inc. Confidential Top renewal strategies in 20 minutes Presented by: AppFolio Date: May 26, 2022 How to remove friction around the renewal process & incentivize residents to stay with you year-after-year.
- 3. 3 2022 © AppFolio, Inc. Confidential As an attendee: ● Please ask questions in the Q&A box during our presentation ● You will not be able to engage with the speaker via audio ● Don’t be shy -- when you submit questions, we will try to answer them as we go through our presentation or at the end if there is time And when you log off of the webinar, you’ll be presented with a survey where we’ll ask you a few questions about what you thought, so please be sure to let us know - we really do thrive on the feedback we receive!
- 4. 4 2022 © AppFolio, Inc. Confidential Product Specialist Lauren Suggett Presenter Marketing Programs Jenny Domash Presenter
- 5. 5 2022 © AppFolio, Inc. Confidential Where are you calling in from?
- 6. 6 2022 © AppFolio, Inc. Confidential Agenda NEW 01 Renewal foundations How to lay the right foundations to get residents to stay 02 Overcoming objections What are common objections and how you & your team can overcome them? 03 Incentives that work Ways to incentivize residents to stay with you year- after-year
- 7. 7 2022 © AppFolio, Inc. Confidential Meet AppFolio 00
- 8. 8 2022 © AppFolio, Inc. Confidential Leader in the real estate vertical
- 9. 9 2022 © AppFolio, Inc. Confidential 9 2022 © AppFolio, Inc. Confidential Deliver a great experience Keep books & report results Operate & optimize your properties Market & lease successfully Increase team productivity Manage & grow your business Remarkable service Exceptional ease-of-use Groundbreaking innovation Insights you can rely on Unified system architecture Real-time, accurate data Better decision-making Built for scale Performance Insights End-to-end digital workflows Enhanced control & access Intelligent automation Modern flexibility Unparalleled mobility Anywhere, anytime, on many devices Accounting & reporting Communication Smart Maintenance Custom system configurations User-based preferences Seamless integrations One powerful platform
- 10. 10 2022 © AppFolio, Inc. Confidential State of the industry State of the Industry ● Q1 2022 continued to break records, even with growth moderating in certain areas ● Rent prices are skyrocketing and occupancy rates are now above pre-pandemic levels SFR Boom + Multifamily Recovery ● YoY SFR rent growth at 14%, above pre-pandemic levels ● Occupancy rates across all SFRs averaged 95% and NOI is up nationwide ● National MFR vacancy rate reverted to pre-pandemic level by the end of 2021 ● Even lowest growth metros still saw between 4-8% rent growth Economic Pressures ● Inflation and interest rate increases causing fiscal spending uncertainty ● Navigating rising inflation pressures, demand for higher compensation, and increasing material costs are some of the top challenges facing PM businesses today
- 11. 11 2022 © AppFolio, Inc. Confidential The nationwide average cost to a property management company for every resident that leaves is about $3,900.
- 12. 12 2022 © AppFolio, Inc. Confidential Renewal foundations Lay the right foundations to make sure residents want to stay 01
- 13. 13 2022 © AppFolio, Inc. Confidential Unit Improvements/ Maintenance Communication Flexibility How has your property management company or landlord exceeded expectations in the last year? 22% 22% 12%
- 14. 14 2022 © AppFolio, Inc. Confidential Lead with empathy ● Responsiveness to residents needs, questions, concerns, and time-sensitive updates about the community ● Adopt the right technology to streamline tenant management ● Enforce community rules and helpfully handle disputes with neighbors Ensure you’re meeting residents’ expectations ● Flexibility with payment dates and lease terms ● Responsiveness to maintenance requests ● Communication with tenants Attract and retain the right employees ● Unhappy residents ↔ staff burnout ● Make early training a priority ● Know where to lean on technology to automate tasks Leading with empathy lays the right foundation for retaining the right people
- 15. 15 2022 © AppFolio, Inc. Confidential Overcoming objections Preparation to help make difficult renewal conversations better 02
- 16. 16 2022 © AppFolio, Inc. Confidential Before we begin, ask yourself these questions: ● Is your renewal notice schedule timely? ● Have you tested your resident pool to determine the best time to send renewal notices? ● Have you established minimum and maximum increase levels? ● Do all leasing agents know how to “defend” situations where new leases are lower than the expiring rental rate? Define your property goals and lease adjustment policies
- 17. 17 2022 © AppFolio, Inc. Confidential “I can’t afford these rates.” How to respond ● Empathize and ask questions to understand why the new rate is unaffordable and by how much ● Remind the resident to consider costs of moving ● If the rent increase has truly created an affordability issue then: ○ Explain the improving market may cause some residents to move to find a unit in their price range ○ Offer transfer to a less expensive, smaller apartment at yours or a sister community What to say ● Have you had the chance to shop other communities to make price comparisons? ● Customers are willing to pay more for an apartment right now because there are fewer apartments available and demand is high. ● Some residents choose to transfer to a less expensive or smaller apartment—are you interested in discussing those options? ● Transferring to another community of ours in the area is also an option. Would this be something worth exploring?
- 18. 18 2022 © AppFolio, Inc. Confidential “I don’t care about your explanation, I want to talk to your boss.” How to respond ● Express empathy and appreciation. ● Confirm your willingness to escalate concerns and initiate a second evaluation of their rates ● If the customer insists, provide your supervisor’s name and contact info. Notify your supervisor ● Tell the customer they will receive a letter within 2-3 days explaining the evaluation and whether or not their renewal rates can be modified What to say ● I’ll confer with my supervisor to initiate another evaluation of your renewal options. The evaluation will tell us if your renewal options can be changed. ● It will take 2 –3 days to complete the evaluation. We’ll follow up in writing to explain the evaluation and tell you if we can improve your renewal rates. ● I’m happy to have my supervisor contact you. What’s the best time and method? ● What questions do you have about your renewal options? I’ll write them down and obtain answers for you. ● We appreciate the business you’ve given us. I hope you’ll decide to renew.
- 19. 19 2022 © AppFolio, Inc. Confidential Encouraging residents to renew Encourage your residents to stay and reward them for doing so 03
- 20. 20 2022 © AppFolio, Inc. Confidential 5 ways to encourage renewals 1 Provide flexible lease terms Allow residents to choose the best offer for their needs.
- 21. 21 2022 © AppFolio, Inc. Confidential 1 2 Bring renewals to the renter Make it easy for residents to review and sign renewals online through the Online Portal. Provide flexible lease terms Allow residents to choose the best offer for their needs. 5 ways to encourage renewals
- 22. 22 2022 © AppFolio, Inc. Confidential 1 2 Bring renewals to the renter Make it easy for residents to review and sign renewals online through the Online Portal. Provide flexible lease terms Allow residents to choose the best offer for their needs. 5 ways to encourage renewals 3 Reach out to your residents Touch base with residents regularly to get a pulse on how their feeling about renewing - hear their concerns!
- 23. 23 2022 © AppFolio, Inc. Confidential 1 2 Bring renewals to the renter Make it easy for residents to review and sign renewals online through the Online Portal. Provide flexible lease terms Allow residents to choose the best offer for their needs. 5 ways to encourage renewals Gift cards to local restaurants Show residents your care by offering deals or gift cards to local shops or restaurants. 3 4 Reach out to your residents Touch base with residents regularly to get a pulse on how their feeling about renewing - hear their concerns!
- 24. 24 2022 © AppFolio, Inc. Confidential Gift cards to local restaurants Show residents your care by offering deals or gift cards to local shops or restaurants. 1 2 3 4 Reach out to your residents Touch base with residents regularly to get a pulse on how their feeling about renewing - hear their concerns! Bring renewals to the renter Make it easy for residents to review and sign renewals online through the Online Portal. Provide flexible lease terms Allow residents to choose the best offer for their needs. Give other financial incentives Offer incentives like one month of free parking, storage, or other fees - especially if rent increased! 5 5 ways to encourage renewals
- 25. 25 2022 © AppFolio, Inc. Confidential Which parts of the marketing and leasing process would you most like to see automated or streamlined through the use of technology?
- 26. 26 2022 © AppFolio, Inc. Confidential Would you like a customized demo of AppFolio Property Manager? 26 Quick Poll
- 27. 27 2022 © AppFolio, Inc. Confidential Top maintenance challenges and how to overcome them Presented by: AppFolio Date: July 28, 2022 Save the date!
- 28. 28 2022 © AppFolio, Inc. Confidential Ask us anything. 28 Questions?
- 29. 29 2022 © AppFolio, Inc. Confidential Thank you ✌
Editor's Notes
- Good morning or afternoon everyone. Welcome to our Top Renewal Strategies Webinar! As the title states, we have 20 minutes to talk about best practices for reducing friction in your renewal process so your valued residents stay with you, year-after-year. The record-high rent prices and crazy demand in the market today is impacting everyone in the property management ecosystem, and retaining your valued residents can help promote stability in your business. We’re here today to show you how having a thoughtful renewals strategy in place can benefit you and your business overall.
- Before we begin, let’s review the obligatory webinar housekeeping items; Please ask questions in the Q&A box during our presentation While you won’t be able to engage with the speaker via audio or chat Don’t be shy – when you submit questions we will try to answer them as we go through our presentation or at the end if there is time VERY IMPORTANT at the end of the webinar you’ll be presented with a survey where you can share your thoughts on the content. We really do thrive on the feedback we receive, so please submit your responses
- This is us! My name is Lauren and I’m on the product marketing team here at AppFolio. I’m currently focused on understanding how property management businesses with between 50-500 units can get the most out of AppFolio’s software. I’m a mom of two young kids based in beautiful Carlsbad CA and do everything I can to take advantage of our proximity to the beach. Happy to be here today! I’ll kick it over to my co-host Jenny. {{Jenny description}} Thank you Lauren! Welcome everyone, as mentioned my name is Jenny and I am on the marketing programs team here at AppFolio. Though my first few years at the company I was a part of our customer success division where I got to work in our software with property managers every day. I am a Californian as well and have spent the last 10 years in Santa Barbara. I’ll be here to help answer any questions with Lauren, so please speak up in the Q&A as we want to hear your burning questions!
- And now before we dive into the meat and potatoes, we’d like to hear from you! Where are all our attendees joining us from? Tell us in the chat box! And I will pass it back over to you Lauren.
- Great! So here’s a quick peek at our agenda for today. After a brief introduction of AppFolio, we’ll get into the importance of laying renewal foundations that encourage residents to stay, discuss a few common objections and how you can handle them, and wrap up with a few ideas for meaningful incentives that sweeten the deal for residents considering a lease renewal.
- So hopefully you know at this point, but we are AppFolio!
- Our teams bring over 15 years of experience developing award-winning software designed for single-family and multifamily property managers, and community association managers. With over 6 million units currently managed on our platform, we’ve come a long way and are excited about the journey ahead. While our software is foundational to our success and the success of our customers, it’s our approach as a true technology partner that sets us apart from the rest. We truly view our customer connections as the heart of our culture. They are core to how we fuel our innovation, service, and growth.
- Innovation, service, and growth are themes you’ll see reflected on this slide, which gives a high-level view of the various components of our core solution, AppFolio Property Manager. AppFolio Property Manager is one powerful platform built to serve as the technological foundation for your business. We strive to deliver remarkable service, exceptional ease-of-use, and groundbreaking innovation to support continued success and business growth for each and every customer. [Build] In this session we’ll focus on Leasing Renewals, and if you’re interested in learning more about our platform’s other capabilities, you can request a customized demo by completing our survey as you exit the webinar. Great! Thanks for your attention thus far – it’s time to dive in to today’s topic.
- To help set the scene for our discussion, I’d like to give a quick overview of some of the industry trends and impacts we’ve been seeing so far in 2022. Likely not news to you, rent prices are higher than ever and demand, though appearing to cool off slightly in multifamily in April, is still strong for both property types. SFR in particular has seen pretty insane demand over the past two years, and NOI is up nationwide. Economic factors are also putting pressure on operators. We’ve all felt the sting of inflation at this point, and no doubt property management companies are being challenged to navigate its various effects, like employee demands for higher compensation and increases in material costs. So, while you may be bringing in more rent revenue today, these economic pressures are likely creating a critical need to double down on operational efficiencies and ways you can maximize revenue and profits across your business.
- Resident renewals, the topic of our webinar today, is a super meaningful way to address these focus areas. I think this stat does a great job at illustrating the opportunity a solid renewals strategy presents. Turning a unit is a costly outcome of a resident not renewing their tenancy – on average in the US, it costs a property management company nearly $4000 each time a resident moves out, Depending on the size of your business and the rate at which residents are moving on, this could significantly impact your bottom line. The cost to turn a unit could feasibly outweigh the income bump from a new resident, even if you’re seeing increased rent prices and demand for your units. This is why we believe resident retention should be the highest priority within your overall leasing strategy. It’s critical to consider during leasing season especially, but should be an ongoing initiative every month of the year since it can have a major impact on your cash flow.
- So what can you do to encourage renewals? There are a few foundational elements we’ll explore today.
- https://online.fliphtml5.com/ltql/zatk/#p=2 The data you see here was sourced from a national survey AppFolio conducted among US renters to help provide Property Managers a better understanding of renter motivations and how renters perceive property management companies. One of the questions we asked in our survey was, “How has your property management company or landlord exceeded your expectations in the last year” The top response was “nothing” at about 36%, which represents a great area of opportunity on its own. But for the purposes of today’s presentation let’s focus on the next most common responses. Property managers delighted their residents in the areas of unit improvement and maintenance, communication, and flexibility. We can deduce that, as a result of the pandemic, people’s lives are quite different than they were previously and many are still in flux. Folks are spending more time in their homes as well with the shift to remote work. So cultivating an approach that emphasizes flexibility, transparent and timely communication, and attentiveness to maintenance is a great place to start.
- In that same survey, we dug a little deeper into those responses. In doing so we very clearly saw that the true foundation for retaining valued residents is leading with empathy in every interaction. Empathy, kindness, and flexibility were what residents reported made them most likely to express satisfaction with their property managers. The definition of empathy from my Oxford dictionary is “the ability to understand and share the feelings of another.” Putting yourself in their shoes, meeting them where they are, trying to see where they’re coming from. With your residents, how do you do this in a practical way? Responsiveness is a huge one – nobody likes to feel like they’re being ignored. Communicating to them – even if it’s just a confirmation that you’ve received their question or email, can go a long way. Responsiveness can get more difficult at scale, so you might consider adopting technology to help you better manage your resident communications or enable residents with an on-demand way to self-serve information, like an online portal Additionally, community rules are put in place to benefit all residents. Ensuring that you’re enforcing them consistently and fairly, and leaning on empathy when stepping in to mitigate any neighbor disputes will help you gain the trust and respect of your residents. Ensure you’re meeting residents expectations—when you’re coming from a place of empathy, you can understand why a resident would hope for the things in this bucket from their property manager, and appreciate when they are offered. And finally here, leading with empathy also applies to your workforce. Your employees have a massive impact on your residents’ desire to continue living at your property. When your team feels heard and understood, they’re more likely to carry that through in their interactions with your residents, so cultivating an empathy-driven company culture should be a key part of of your renewal strategy (really, your biz strategy as a whole).
- Ok. Now that we’ve levelset on the foundations of your renewal strategy—what you should be doing year round— let’s move into crunch time…the actual renewal process. This next portion of the webinar will address objection handling. Of course, you want great residents to stay, so being prepared to address any objections your renewal offer may spark is important. This also means being prepared to have potentially difficult conversations with your residents. As mentioned earlier, today’s market is incredibly competitive with leasing demand and rising rent prices. Knowing when to push to keep a renter and when to cut your losses is also an important part of building out your renewal strategies. So while being prepared to handle objections should help make difficult renewal conversations better, it may not necessarily make them easier.
- To ensure you’re setting yourself and your team up for success, it’s important to ensure clarity and alignment on property goals and lease adjustment policies, and make sure your staff is trained and feeling confident in their ability to navigate renewal conversations effectively. Give yourself a temperature check by asking yourself these questions: Is your renewal notice schedule timely? - For some of you, the timeframes here might be dictated by city or state regulations Have you tested your resident pool to determine the best time to send renewal notices? Again, this could be dependent on local regulations Have you established minimum and maximum increase levels for rent changes? So you’re not doing this ad hoc Do all leasing agents know how to “defend” situations where new leases are less than the expiring rental rate? Again, aligning around these questions will help drive consistency in how your staff approaches renewal conversations, but can also ensure each resident is being treated in a consistent and fair manner as well.
- Ok so this first objection is potentially the most common you might hear, perhaps even moreso today as rents are rising across the country: “I can’t afford these rates.” When responding to this concern, common theme here— it’s important to respond from a place of empathy — especially if this is a resident you want to retain. Seek to understand why they consider this new rate to be unaffordable, and by how much. Talk through various options with the resident. Moving elsewhere could seem like it would solve the affordability problem, but moving is expensive in and of itself. Could it be worth staying to avoid those costs? You could encourage your resident to shop other communities to compare rent rates (ideally you have already done this as a part of your leasing and renewal strategy) and see if there are other units or homes in their price range. If you have more than one property in the area - you could also propose a transfer to a unit with lower rent. At the end of the day you certainly want to make sure you feel confident that your residents can pay their rent if affordability really is an issue. Here are some of the ways you can guide the conversation: Have you had the chance to shop other communities to make price comparisons? Explain that customers are willing to pay more for an apartment right now because there are fewer apartments available, and demand is high. Some residents choose to transfer to a less expensive or smaller apartment, are you interested in discussing those options? Transferring to another community of ours in the area is also an option. Would this be something worth exploring?
- There are many other objections we could walk through, but in the interest of time we’ll cover one more: “I don’t care about your explanation, I want to talk to your boss.” Some of you might be the boss, I think some of these suggestions are still applicable for you and could absolutely benefit other members of your team. Of course, set the tone with empathy and try not to get defensive - an unexpected rent increase could be jarring, so express your understanding that it can be hard to hear certain rent increases and know the resident might need a more in depth explanation. Confirm that you hear their concerns and this is something you’re willing to escalate and give another look at the evaluation of their rates. If they insist, you should provide your supervisor's name and contact info. Foresight here is key – be sure you have a plan like this in place beforehand so you can quickly notify your supervisor. Tell the resident they’ll receive a letter within 2-3 days to explain the evaluation and whether or not their rates can be modified. Be sure not to make any promises you can’t keep. Here are some talking points to help navigate such a conversation: I’ll confer with my supervisor to initiate another evaluation of your renewal options. The evaluation will tell us if your renewal options can be adjusted. It will take 2 –3 days to complete the evaluation. We’ll follow up in writing to explain the evaluation and tell you if we can improve your renewal rates. I’m happy to have my supervisor contact you. What’s the best time and method? What other questions do you have about your renewal options? I’ll write them down and make sure I get answers for you. We appreciate the business you’ve given us. I hope you’ll decide to renew. And at the end of the day, know when to cut your losses - especially if demand for units is high in your area.
- Finally, let’s talk about some ideas that can help motivate residents to renew. Taking action on encouraging residents to renew is a very important component of your strategy if there’s a lot of competition or new developments leasing up in your area. When thinking about how to incentivize, surprise! Doing so from a place of empathy is key to offering something impactful…if your incentive isn’t meaningful to your resident, what’s the point of offering it?
- We’ll share five examples of meaningful renewal incentives: First, flexible lease terms. Allow residents to choose the best offer for their needs - whether it be a 3 month lease or 13 month lease. This offer aligns with the fact that satisfied residents appreciate flexibility from their property managers.
- Next, bring renewals to the renter. Make it easy for residents to review and sign renewal documents. When was the last time you had to print something out to sign it? It’s a pain and can be a frustrating downward spiral…no paper? No ink? Printer error? Ew. Enabling residents to review and accept their renewal completely online without paper or printing removes a number of barriers and manual effort and can also improve turnaround time as they will be able to sign and submit documents from a mobile device, wherever they may be at the time.
- Another way to encourage renewals is through ongoing communication with residents throughout the course of their lease. Tough base regularly on various topics, whether it’s 1:1 or 1:many via a community newsletter or announcement. With a relationship established, you can start seeding the topic of renewals in the course of these other conversations. This approach could get residents thinking about renewing earlier on, and consequently help you get ahead of renewal objections before a renewal offer is even extended.
- The 4th idea is to offer gift cards to local restaurants or businesses. This is really easy and can be a very low cost way to show residents you care and encourage them to be part of their community. There may even be an opportunity to partner with local businesses on this front — many would be eager to have their services promoted to your residents.
- And finally, you could consider offering other financial incentives. Offering a free month of rent may not be an option, especially if you’re raising rates, but waiving other fees like parking or storage for a month or two can help offset things like rent increases or other deals you might be offering to brand new residents. It’s also a way to demonstrate that you understand the financial impact of increased rent.
- https://online.fliphtml5.com/ltql/zvqk/#p=28 So as we wrap up today, I wanted to call attention to another piece of data we gathered through a survey among Property Management employees. The leasing process has changed a great deal since the start of the pandemic, and on the whole demand is very high, as are renter expectations. To ensure you’ve got all bases covered, it’s crucial to lean on technology for help with the repetitive processes that can be automated, so your teams have more time for more meaningful work, like creating healthy, empathy-based relationships with residents. In this survey we asked employees of property management companies which parts of the marketing and leasing process they would most like to see automated or streamlined through the use of technology. As you can see here, processing lease renewals was the top answer. AppFolio offers effective solutions that span the entire leasing process, and if you’re interested in seeing them in action I encourage you to request a customized demo through the survey you’ll see at the close of this session.
- Alright - now time for a quick poll! If you’re interested in learning more about how AppFolio can support you and your team with leasing, renewals and other property management workflows, we’d love to set up a customized demo with you! You can respond yes or no to the poll that will pop on your screen …
- ** Finally – if you enjoyed the content today, I hope you’ll consider joining us in July for our webinar on Top maintenance challenges and how to overcome them. Stay tuned for a formal invitation in the coming weeks.
- Okay that wraps up our presentation today, we have a few minutes for Q&A…. Thank you to everyone who has submitted their questions already. And if you haven’t yet done so, there’s still time to submit them using the Q&A module in Zoom. Seed Questions: X X X
- Thank you all so much for your time and attention! That’s all the content we have but feel free to stick around if you have any questions for myself or Jenny—who is a product expert and can address the many ways AppFolio can help with leasing renewals. **************************************Questions************************************** And that concludes the Q&A portion for today. Lauren, I want to thank you so much for spending time with us and sharing your experience as well as the great research findings. And I want to thank you all in attendance today. We know that your time is valuable, so thank you for spending the last 30 minutes of your day to chat with us. We hope it was valuable and that you found it time well spent. Like we said again at the beginning, today’s market is rapidly changing. But as you saw hopefully in this presentation, renewals lend a great opportunity to give your business stability and improve the efficiency of your overall operation. So thank you again and we hope that you have a great rest of your day!