Multifamily Focus

Rental demand is strong

By Yardi Blog Staff on Oct 13, 2013 in News

Homeownership across the U.S. continued to decline 40 basis points in the second quarter of 2013, creating a favorable context for multifamily to thrive. Rental demand remains strong with occupancy gains and rent growth occurring in every major metro around the country. Annual rent growth across the U.S. is currently averaging 3.4 percent, according to research data from Jones Lang LaSalle.

Driven by an improving job market as well as significant population growth recorded within two key renter demographics (eco-boomers and empty nesters), both multifamily occupancy and rents have climbed well above their 10-year averages, JLL research shows.

Richmond, Portland, Nashville, Dallas-Ft. Worth and the Inland Empire have seen the largest increase in rentership over the last 12 months with more than 4.0 percent of households migrating away from home-ownership.

All signs seem to point out to a rebounding rental market, yet the road to successful renting is not always smooth. Ensuring an uninterrupted cash flow falls almost entirely on property managers and their ability to retain quality tenants. A recent report from J Turner Research, a leading marketing research firm exclusively serving the multifamily industry, reveals that three out of top five complaints are directly related to customer service as delivered by the on-site management teams and maintenance technicians.

The top 10 multifamily apartment resident complaints resulted from J Turner’s survey are:

1. Rental rates
2. Poor grounds / common area upkeep
3. Disorganized staff / lack of communication with staff
4. Quality of response to maintenance requests
5. Overall customer service of management staff
6. Quality of parking / parking availability
7. Concerns over security / safety / lighting
8. Lack of upgraded amenities
9. Pets not on leash / poor pet waste removal
10. General lack of preventative maintenance

 

The report was based on the analysis of 10,000 customer satisfaction surveys completed over the past two years at communities nationwide.

“Apartment residents remain concerned with a broad range of customer satisfaction issues but far and away the immediate opportunity to improve customer service and resident satisfaction levels is by addressing dissatisfaction with onsite staff responses to resident concerns,” said J Turner Research president Joseph Batdorf. “J Turner Research tracked more than 19 different types of complaints as part of our examination of customer service surveys and the results were unequivocal: resident relations with apartment community staff are one of the key focus areas resulting in concerns that ultimately impact community reputation management and online ratings and reviews.”

How can landlords get the most out of their rental properties?

Having a responsive property management team as well as professional maintenance staff can significantly increase a property’s performance. Additionally, focus should be on renter satisfaction as it is a key factor in turnover rates. Keep in mind renters are most sensitive to aspects that are most likely to impact their day-to-day existence; they won’t care much about social networking sites and community events if their maintenance requests are not accommodated in a timely and responsive manner.

The best thing that property managers can do is prioritize, especially when confronted with staffing issues or budget cuts. Consider cutting down on certain areas like social events or welcoming gifts and redirect the funds to fulfilling more ardent needs such as unit improvements, appliances upgrades or hiring additional maintenance staff.

On the other hand, many residents, especially the younger generation, expect their apartments to be kept up-to-date in terms of technological offerings. Amenities like electric car charging stations, availability of online portals for submitting requests and paying rent or setting up online systems for monitoring the laundry process will score you extra points in terms of resident appreciation. The residents’ level of satisfaction, especially when translated into online reviews and ratings, can have a strong influence on how your community is perceived by prospective clients, hence the importance of implementing a sound reputation management system.

“We’re certainly beginning to see an industry-wide pattern where communities with the highest levels of customer satisfaction also benefit from the best online ratings and reviews,” added Batdorf. “As reputation management strategies in multifamily continue to evolve, ongoing measurement of customer satisfaction (and dissatisfaction) remains a critical tool for evaluating the effectiveness of initiatives designed to improve customer service.”