According to Buildium, and other industry leaders, the rental market is experiencing significant changes. Property vacancies are increasing, properties are staying vacant longer, and resident satisfaction is more crucial than ever. Property management companies can prioritize resident retention in many ways but focusing on improving the maintenance process should be a dominating priority. According to data, 31% of residents say they chose to leave a property due to poor maintenance practices. Meaning an unorganized maintenance process can be a detriment to your vacancy rates.
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Given that heightened rental turnover has a direct impact on your financial performance, an uptick in resident turnover is likely to result in diminished investor retention.. You don’t want to get caught up in a vicious cycle. But the good news is, you can forecast these issues before they become major problems by tracking maintenance KPIs.
These KPIs can help you identify potential problems before they become bigger issues that lead to increased turnover.
In this article we will discuss how you can use maintenance KPIs to impact retention, and specifically what metrics you should monitor.
To download our guide to retention KPIs, fill out the form for free access.
How Does Maintenance Impact Resident and Investor Retention?
Maintenance strategies are crucial in resident and investor retention in real estate. Here’s how:
1: Resident Satisfaction: Quick repairs and well-kept properties make residents happy. Which means they’re more likely to stick around. But if maintenance gets neglected, the irritation can lead to them exploring other property management companies, leading to more people moving out.
2: Perception of Value: Regular maintenance helps uphold the perceived value of the property. When companies invest in maintaining their properties, residents perceive them as desirable places to live. This perception of value not only encourages residents to stay but also attracts new renters.
3: Reduced Vacancy Rates: Residents are more likely to stay in properties that are well-cared for, reducing turnover and vacancy costs for investors. Lower vacancy rates contribute to a more stable cash flow and higher returns on investment.
4: Positive Reputation: Properties with a reputation for good maintenance attract both residents and investors. Positive word-of-mouth and online reviews can drive demand for rental units and increase property values. Conversely, neglecting maintenance can lead to negative reviews and a tarnished reputation, impacting both resident retention and investor interest.
5: Long-Term Asset Value: Regular maintenance preserves the long-term value of the property. Investors are more likely to retain their investments when they see their assets appreciating over time due to proper upkeep. Maintenance helps prevent costly repairs and prolongs the lifespan of the property’s components, ensuring a better return on investment in the long run.
In summary, maintenance directly influences resident satisfaction, perception of value, vacancy rates, property reputation, and long-term asset appreciation. By prioritizing maintenance, property owners can improve resident retention and investor confidence, leading to a more successful and profitable real estate investment venture.
How To Use Maintenance Data to Combat Retention
Maintenance data can be a powerful tool for combating retention issues in real estate by enabling property managers and investors to identify trends, address issues proactively, and improve overall resident satisfaction.
1: Identify Common Maintenance Requests: Analyze maintenance data to identify the most common issues reported by residents. By understanding recurring maintenance issues, property managers can use Property Meld to see underlying maintenance issues and implement preventative maintenance practices to minimize expensive maintenance emergencies.
2: Prioritize Maintenance Tasks: Use maintenance data in Property Meld to prioritize tasks based on urgency and frequency. Focus on addressing high-priority maintenance requests promptly to ensure resident satisfaction and prevent minor issues from escalating into more significant problems.
3: Track Response and Resolution Times: Monitor response and resolution times with Property Meld Insights dashboard to ensure timely and efficient service delivery. Use historical data to identify areas for improvement and streamline maintenance processes to enhance resident experience.
4: Monitor Maintenance Costs: Track maintenance costs associated with different types of repairs and maintenance activities. Analyze cost data to identify opportunities for cost savings and optimize maintenance budgets without compromising on service quality.
5: Predictive Maintenance: Utilize maintenance data to implement predictive maintenance strategies. By analyzing historical maintenance data and trends, property managers can anticipate potential issues before they occur and proactively address maintenance needs, minimizing disruption to residents and reducing overall maintenance costs.
6: Feedback and Follow-up: Use maintenance data as a feedback mechanism to solicit input from residents regarding their satisfaction with maintenance services. Follow up with residents after maintenance requests are completed to ensure their needs have been met and address any outstanding concerns promptly.
7: Benchmark Performance: Compare maintenance data against industry benchmarks and best practices to evaluate performance and identify areas for improvement. Benchmarking allows property managers to set performance targets, track progress, and implement strategies to enhance maintenance efficiency and effectiveness.
8: Cost Monitoring: Using maintenance data you can track the amount spent on maintenance. Keeping track of these costs, and benchmarking against the industry can help you keep costs competitive, and offer a better ROI to your investors.
By leveraging Property Meld’s maintenance data effectively, property managers and investors can proactively address maintenance issues, enhance resident satisfaction, and ultimately improve retention rates in real estate properties.
What Metrics Are Related to Retention?
Understanding the pivotal role of maintenance operations in fostering investor and resident retention is essential for property management success. Neglecting maintenance can severely strain relationships with customers, both investors, and residents. Thus, monitoring maintenance KPIs becomes imperative to ensure optimal resident satisfaction and investor contentment.
Retention-Driven KPIs:
1: Chats Per Meld/Work Order: This metric reflects the level of communication among residents, property management, technicians, and vendors. It acts as a leading indicator for repair speed and overall stakeholder engagement in the maintenance process.
2: % of Resident Submitted Work Orders: An indicator of repair responsiveness, demonstrating residents’ familiarity with the maintenance process. Higher percentages signify efficient resident engagement.
3: Speed of Repair: Crucial for resident satisfaction and lease renewals, indicating how swiftly maintenance issues are addressed. Any decline in repair speed may forecast potential resident or investor turnover.
4: Annual Spend/Unit: A key metric for investor retention, reflecting maintenance costs as a proportion of rental income. Investors prioritize maintaining a positive Net Operating Income (NOI), making this metric essential for mitigating churn risks.
5: Resident Satisfaction: Paramount for resident retention, reflecting the overall happiness of residents. A surge in low ratings signals potential turnover risks.
By monitoring both leading and lagging maintenance indicators, property managers can proactively address issues, ensuring high levels of investor and resident satisfaction, ultimately maximizing retention rates.
To view KPI benchmarks from leading property management companies, download our Retention KPI Guide
Or to see how you gain access to these maintenance KPIs, book a demo with our team to see our powerful Insights tool in action.
