In the evolving world of rentals, most technological advancements have focused on attracting new residents. Yet, many operators overlook a critical aspect of their business: resident retention. This oversight is puzzling because acquiring new residents is significantly more costly than retaining existing ones. According to research from the British Property Federation (BPF) and the Association for Rental Living (ARL), retention rates in Build to Rent (BTR) sit at around 50%. A well-executed renewals strategy has the potential to improve this figure dramatically, leading to a substantial increase in Net Operating Income (NOI) for owners.
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The BTR industry has long been comfortable with a reactive approach to resident renewals, often accepting a 50% retention rate as the norm. However, in most industries, such a figure would be deemed unacceptable. This mindset has resulted in a “status quo” approach where renewals are handled with outdated methods—often involving little more than sending an impersonal email with an attached PDF. This lack of innovation in the renewal process is a missed opportunity, leaving property managers with inefficiencies that can adversely affect the performance of their portfolios.
The reality is that the renewal phase is often treated as an afterthought despite being one of the most crucial stages in the resident journey. While significant resources are allocated to acquiring new residents, retaining them is frequently seen as a secondary concern. This approach is not only inefficient but also costly. Whenever a resident decides not to renew, the property manager incurs additional expenses for marketing, leasing, and preparing the unit for a new resident.
Implementing a robust renewals strategy can be a game-changer. A well-designed strategy reduces turnover and can increase resident satisfaction, streamline operations, and drive higher NOI. Operators can create a more stable and predictable revenue stream by focusing on resident retention, reducing the need for constant new acquisitions.
One of the key elements of a successful renewal strategy is early and effective communication. Property managers should start the renewal conversation early rather than wait until the lease end date is looming. At Residently, we can proactively manage the renewal process by using automation to gather early intent from residents—up to 60 days before the notice period. This reduces last-minute stress and provides valuable insights into upcoming vacancies, allowing property managers to plan more effectively.
The current state of renewal processes needs to be more cohesive and efficient. Traditional methods rely heavily on manual processes, leading to errors, delays, and poor resident experience. This is where technology can make a significant impact.
Residently’s rental operating system is designed to modernise the renewal process by automating routine tasks and providing a seamless experience for both property managers and residents. Our platform centralises the entire renewal process, allowing property managers to manage renewals at scale while maintaining a personalised approach. This centralisation not only improves operational efficiency but also enhances the resident experience.
For instance, our platform uses AI to generate personalised renewal offers based on various factors, including local pricing insights, property condition summaries, and resident feedback. This level of personalisation demonstrates to residents that their needs are being considered, increasing the likelihood of a positive renewal outcome.
From a resident’s perspective, the renewal process is often cold and disconnected from the rest of their rental experience. This starkly contrasts the engagement they received when moving in, where technology is used to simplify and enhance every journey step.
Residently’s mobile app plays a vital role in this by providing residents with self-service options that allow them to choose the most appropriate next step in their rental journey. Whether they decide to renew their lease, have questions, are undecided, or are looking for a different home, our platform makes the process as smooth and convenient as possible.
The traditional approach to renewals is often reactive, with property managers only stepping in when a lease is about to expire. However, property managers can significantly improve their retention rates by adopting a proactive strategy. This involves early communication and continuous engagement throughout the resident’s tenancy.
At Residently, we believe renewals should be an opportunity to strengthen the relationship between residents and property managers. Using data and automation, we help property managers identify potential issues before they escalate, allowing them to address concerns promptly and effectively. This proactive approach improves resident satisfaction and reduces the likelihood of turnover.
In today’s competitive rental market, resident retention should be a top priority for property managers. Property managers can reduce turnover, increase resident satisfaction, and drive higher NOI by implementing a strategic, technology-driven renewal process. Residently’s platform is designed to support these goals, offering a comprehensive solution that automates routine tasks, personalises the renewal experience, and provides valuable insights to improve decision-making.
As the industry continues evolving, those prioritising resident retention will be better positioned to succeed. By embracing innovation and focusing on the needs of existing residents, property managers can turn renewals from a “black hole” into a powerful tool for growth and profitability.
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