Overcoming Renewal Objections in Single Family and Multifamily Residential: The Key to 2021 Performance

1. Overcoming Renewal
Objections in Single
Family and Multifamily
Residential:
The Key to 2021
Performance

2. 2021 © AppFolio, Inc. Confidential
2
Welcome!
Donald Davidoff
President,
D2 Demand Solutions
Erin Maroul
Director - SMB Strategy,
Appfolio

3. 3 2021 © AppFolio, Inc. Confidential
How to use
this advice
● Recognize that this approach will make renewal
conversations better, not easier
● Fairness is in the eye of the beholder… but it does mean fairness
to you as the operating company as much as to the resident
● When negotiating housing, there is always a social
contract component
● Resist taking on the resident’s emotional state,
don’t make it personal
● Find your own voice

4. 2021 © AppFolio, Inc. Confidential
“My neighbor is paying
less than I am.”
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5. 5 2021 © AppFolio, Inc. Confidential
“My neighbor is paying less
than I am.”
How to respond
● Express understanding and empathy
● Acknowledge the resident’s feedback as potentially correct
● Explain the variables that contribute to price differences for
each apartment (e.g. apartment type, features, floor and
view premiums, timing and lease conditions
● Explore the causes in a non-defensive and positive tone
● Don’t discuss or confirm what other residents are paying
for their apartments
What to say
● I understand why you would question the rate difference. May I
explain the variables that cause the differences to occur?
● Your observation could be correct. It isn’t unusual that similar
apartments are priced differently.
● Rates constantly fluctuate. At move in your neighbor may have
leased at a lower rate based on market conditions at that time.
● If a shorter or longer lease term is selected the rates will be
different.
● Location and interior amenities also create price differences. For
example, a balcony or a view will increase the apartment’s value.
● To protect the privacy of our residents we don’t discuss what
others are paying or why.

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“I’ve been loyal for X
years… How can you do
this?”
02

7. 7 2021 © AppFolio, Inc. Confidential
“I’ve been loyal for X years…
How can you do this?”
How to respond
● Understand this is more of an emotional plea than an
intellectual one
● Express appreciation for their tenure
● Ask permission to explain how rates are decided.
● Ask questions to confirm understanding and diffuse
emotion
● Offer information about market conditions and price
differences
● Offer to consider requests to add value to their
apartment
● Offer lower cost (i.e. smaller and/or less amenitized
units, sister communities, ...)
What to say
● I apologize for the frustration you are feeling as we sincerely
appreciate the business you have given us
● Regular surveys are conducted to help us understand what
others are charging
● In this market, rents are going up because of changes in
supply and demand and [insert data]
● Based on market conditions and the value of our apartments
we believe your renewal options are fair.
● What rents are you seeing in the area?
● [if true] I recognize the size of the increase, but you are still
receiving a ___% discount to new rents
● If you’d like we’ll inspect your apartment to see if interior
improvements or services can be made
● Would you be interested in looking at other homes?

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“The apartments across
the street are less
expensive.”
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9. 9 2021 © AppFolio, Inc. Confidential
“The apartments across the
street are less expensive.”
How to respond
● Express appreciation for the information
● Ask for the name of the community offering a less
expensive rate
● Refer to your market survey and make a comparison
● If the price is accurate, then explain the
feature/services/benefits that distinguish us from that
comp
● If price is not accurate, then offer to follow up to
confirm accuracy and follow up with the resident
● Tell the resident that we’d like them to renew
What to say
● Thank you for making us aware of the pricing difference.
● What is the community you are looking at and the rate they
are offering? On what apartment type? What move in date is
required to obtain this rate?
● May I explain why your apartment is likely priced higher?
[review competitive differences]
● Our surveys indicate different prices than what you are
reporting.
● We’ll contact them to confirm accuracy and follow up with you
on [insert day, date, time]. What we learn may or may not
make a difference in your renewal options

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“The rates in this letter just
aren’t fair.”
04
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11. 11 2021 © AppFolio, Inc. Confidential
“The rates in this letter
just aren’t fair.”
How to respond
● Ask for specific information to get their perspective
about fairness. Your questions may uncover a latent
service problem as the real issue, not the price; or it
may lead to another scenario (e.g. “it’s unfair because
my neighbor is paying less…,” etc.)
● Answer the underlying issue(s) rather than the notion of
fairness
● If their answer is “this increase is just too high,” offer to
explain how renewal rates are decided and encourage
the resident to shop competitors to make an informed
decision
What to say
● Why do you feel your renewal options are unfair?
● If service issues are identified: What service requests require
our immediate attention? I’ll follow through to make certain
they’re completed.
● Would you like information about how renewal rates are
decided?
● If the increase is just too high:
○ It’s a good idea to shop competitors in the area to make
your own comparisons.
○ We feel that your renewal options are fair and reasonable.
We are basing our opinion of what we know about the
market. Would you like to review the market survey?

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“I can’t afford these rates.”
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13. 13 2021 © 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:
○ Express empathy and a desire to help
○ Confirm that customers are willing to pay the
higher prices occurring in the market
○ Explain that because of the improving market
some residents may find moving a necessity to
find a unit in their price range
○ Encourage the resident to shop competitors
○ Offer transfer to a less expensive, smaller
apartment at yours or a sister community
What to say
● It’s not easy to learn that the cost of living has increased
dramatically. Even if you love where you live it’s important to
consider all of the choices available to you.
● Have you had the chance to shop other communities to make
price comparisons?
● We’ve found that moving is sometimes more expensive than
renewal...
● 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...
● Transferring to another community of ours in the area is also an
option. Would this be something worth exploring?

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“You’re raising my rent but
nothing on the property
has changed.”
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15. 15 2021 © AppFolio, Inc. Confidential
“You’re raising my rent but nothing
on the property has changed.”
How to respond
● Clarify that market conditions cause increases to occur
- not product upgrades
● Review the market survey
● Ask what the resident’s expectations are for product
improvement
What to say
● Based on the demand in our market, our apartments are worth
more today. Supply and demand really drive changes in rent
more than anything else.
● Rent increases occur because of changing market conditions.
We believe our prices are very in line with how we stack up
against the competition. Would you like to see a copy of our
market survey?
● Is there a specific apartment improvement you’d like us to
consider? We’d be happy to inspect your apartment to make
an evaluation.

16. 2021 © AppFolio, Inc. Confidential
“You’re offering new
renters X price on your
website.”
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17. 17 2021 © AppFolio, Inc. Confidential
“You’re offering new renters X price
on your website.”
How to respond
● Ask the customer to refer you to the advertisement with a
different price
● If their comparison is not “apples-to-apples” (e.g. amenity
pricing, vacant apartment pricing, etc.), explain the
differences
● If there is a differential, explain the reason for why this is
occurring. For example: A special price due to location or
to offset moving expenses. [Note: Important if the resident
received a move-in discount.]
What to say
● Thanks for making us aware of the differences you’ve found.
What advertisement are you referring to?
● There are product and location differences that explain the
price. They are…or - Your apartment is worth more because
of ….
● New customers sometimes benefit from a rent concession to
offset the cost of moving. The concession is a one time
discount opportunity that is not repeated at renewal. Do you
remember receiving a concession when you first moved in?

18. 18 2021 © AppFolio, Inc. Confidential
“First you mess up my
move-in and now you’re
increasing my rent?”
08

19. 19 2021 © AppFolio, Inc. Confidential
“First you mess up my move-in and
now you’re increasing my rent?”
How to respond
● Apologize for disappointing the customer at move-in
(or time of service issue)
● Offer to correct outstanding issues
● Separate the move in experience (or service issue)
from renewal
● Acknowledge that we want the resident to stay
● Offer to explain renewal options
What to say
● I apologize that your move-in experience was not positive. We
want to take care of your concerns right away. Are there
outstanding service requests that need our immediate attention?
● Past service issues will not have a bearing on your renewal
options. We’ll definitely consider them separately, and I want to
make sure I resolve those for you.
● May I explain how your renewal options were decided?
● Renewal decisions are focused on what is happening in the
market. Is now a good time to explain our pricing guidelines?
● What information can I provide to help you make an informed
renewal decision?

20. 20 2021 © AppFolio, Inc. Confidential
“I’ve had to live through
this construction mess for
months.”
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21. 21 2021 © AppFolio, Inc. Confidential
“I’ve had to live through this
construction mess for months.”
How to respond
● Express appreciation to the resident
● Acknowledge the construction and associated drawbacks
and benefits
● Offer to confer with your regional manager about the
construction pricing assumptions
● Offer to explain how renewal options are decided
What to say
● We appreciate the patience and understanding you’ve given us.
● There are drawbacks associated with construction. Once
completed we’ll enjoy benefits too.
● (if appropriate), “In recognition of the challenges associated
with construction, you did get the benefit of a concession on
your prior lease…”
● The construction is taken into consideration when the renewal
rates are set. I’ll confer with my manager to confirm the
adjustment was made. I’ll follow up with you to tell you what I
learn. When is a good time for me to contact you?
● Would it be helpful if I explain how renewal rates are decided?
We want to give you what you need to make an informed
decision.

22. 2021 © AppFolio, Inc. Confidential
“Why do I have to pay so
much more for a
short-term lease?”
10
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23. 23 2021 © AppFolio, Inc. Confidential
“Why do I have to pay so much
more for a short-term lease?”
How to respond
● Explain costs associated with the flexibility and convenience
a short term lease provides
● Investigate whether there is flexibility in lease term to offer a
lower rate for a different term
What to say
● Thanks for asking. A short term lease is more expensive
because of the value placed on the flexibility and
convenience it gives the resident
● The majority of our residents prefer a long term lease. Is there
a specific reason you prefer a short term lease?

24. 24 2021 © AppFolio, Inc. Confidential
“When I moved in, I got X
price… Why is the rent so
high now?”
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25. 25 2021 © AppFolio, Inc. Confidential
“When I moved in, I got X price…
Why is the rent so high now?”
How to respond
● Review the resident’s move-in accounting
● If they did receive a concession acknowledge it and
explain how this impacts their renewal rates
● If they did not receive a concession, discuss changing
market conditions and how these impact renewal rates
● Share your market survey and/or encourage the resident
to shop the market
What to say
● You may have received a move-in concession. May I take a
moment to review your account information?
● Yes, you did receive a move-in concession that saved you
$_____ during your lease. The concession was a one time
savings opportunity. Concessions are not repeated, and the
renewal offer reflects current market conditions.
● Would you like information about how your renewal rates were
arrived at?
● No, you didn’t receive a move-in concession. However, market
conditions have changed since you moved in. I’ll be happy to
explain this to you

26. 2021 © AppFolio, Inc. Confidential
“I’m not comfortable
committing with all the job
uncertainty out there.”
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27. 27 2021 © AppFolio, Inc. Confidential
“I’m not comfortable committing with
all the job uncertainty out there.”
How to respond
● Empathize with the resident’s fears and uncertainties
● Confirm that this is the only reason holding them back
from renewing [if there are other reasons, we want to
know that before going further]
● [Recommended] Offer a job loss addendum to waive
early termination penalty (still has normal notice
requirement)
● [If your company doesn’t allow] Explain how MTM works
What to say
● I certainly can understand the uncertainty this economy
is creating
● Is this the only thing holding you back from renewing?
● Good news! In an effort to help deal with the economic
uncertainty, our company is pleased to be able to offer
you a job loss addendum. If you have a major
employment disruption, all you have to do is give normal
notice and we’ll waive any early termination penalty.
Does that take care of the concern?

28. 28 2021 © AppFolio, Inc. Confidential
“I don’t care about your
explanation, I want to talk
to your boss.”
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29. 29 2021 © AppFolio, Inc. Confidential
“I don’t care about your explanation,
I want to talk to your boss.”
How to respond
● Express empathy and appreciation. The emotional plea
indicates they are not prepared to hear you
● Confirm your willingness to escalate concerns and initiate
a second evaluation of their rates
● Explain that the Regional Manager will participate in the
evaluation
● 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
● Encourage the resident to comparison shop while the
evaluation is being completed
● Close by confirming when evaluation will be complete
and the letter delivered
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.
● What questions do you have about your renewal options? I’ll
write them down and obtain answers for you. [Write down the
customer’s questions confirm]
● 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.
● While we’re doing the evaluation we encourage you to shop
other communities in the area. It’s much easier to make a
decision if you are well informed.
● I’m happy to have my supervisor contact you. What’s the best
time and method?
● We appreciate the business you’ve given us. I hope you’ll
decide to renew.

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Questions

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Thank you!