Pushing Renewals
Here’s how to prep residents for rent increases.
While apartment owners have suffered in most areas of the country over the past few years, residents certainly haven’t. Renters feasted on falling prices and concessions of one, two, or three months. But now that apartment owners have started pushing prices, it’s important to prepare residents.
Selling a rent hike starts with the property management staff. Florida-based Gables Residential asks on-site managers to enter data into the property’s pro forma to demonstrate the importance of minor rent increases to a community’s bottom line. “Everything about increasing rents makes their job harder,” Gables COO Mike Helfley acknowledges, including handling “new leases, renewals, [and] general customer interactions like maintenance requests,” he says. “You have to make a compelling case and convince your own team. They have to believe in the importance of raising rates to the company.”
Once the leasing agents see the impor tance of dr iving rent increases, the key is getting the resident to go along. Interestingly enough, Steve Hallsey, CEO of AMLI Residential’s management company in Atlanta, says this starts with sending residents to local competitors. “As markets to improve, we encourage people to see what the market is bearing,” he says. “It’s an extremely easy thing to do with the Internet.”
Usually residents will find that prices are fairly similar across the board—or at least close enough to avoid the hassle of moving. “[Higher rents] is not that difficult of an argument to make [to residents] when all of the banner signs are gone,” says Martha Carlin, vice president and director of property operations for United Dominion Realty Trust. “In a lot of markets, [residents and prospects] can see that and they can shop around.”
It also never hurts to remind residents that they’ve enjoyed uncommonly favorable renting conditions over the past few years. (In March, the Wall Street Journal reported that gap between renting and buying a home had grown to be the biggest since the mid-1990s, making renting a very good deal in many otherwise expensive cities.) “On a renewal, we may be giving them an increase, but maybe they haven’t had an increase in two years or maybe last year the rent dropped,” UDRT’s Carlin says. “If you go back and remind them of [that], it makes things a little easier.”
