There are two main ways to lower turnover costs:
- The first is lowering your turnover rate and decreasing the number of turns you must complete. The fewer turnovers you have, the more money you will be making. However, as we all know, turnovers are inevitable. Factors outside your control may cause residents to move, but there are things you can do to limit the number of turnovers you have to compete.
- The second way to lower turnover costs is by automating and optimizing your turn process to make it as efficient as possible. The quicker you complete a turn, the faster a new resident can move in.
Lowering Your Turnover Rate
Keeping renters happy and renewing their lease may seem challenging, but it is achievable. When you focus on improving your resident satisfaction, your turnover rate will also improve. The problem is that many property management companies don’t have a way to track resident satisfaction, nor do they regularly check their online reviews.
Online reviews can be a great way to gauge your resident satisfaction. If you receive high praise from your residents, they are likely happy with their living experience. When you receive a positive review, thank your resident for their kind words. This shows them and other prospective residents that you value their opinions.
However, if you have a low online rating and constantly receive negative reviews, it may indicate that it is time to change. Read through your negative reviews and try to discover a pattern. They may be maintenance-related, management related or centered around one employee. Identifying these trends can help you determine what changes need to be made. When you receive a negative review, respond with an apology and do your best to correct the situation quickly.
In addition to monitoring online reviews, ask your residents for feedback after a request they’ve made is complete. Many property managers send surveys to collect resident input after a maintenance repair. You may also collect annual surveys or ask residents leaving to complete a move-out survey. Allowing your residents to provide feedback makes them feel important, heard, and allows your team to analyze the successes and failures of your process.
Lowering the Cost of Turnovers
You will still deal with turnovers even if you prioritize resident satisfaction. Turnovers are one of the most expensive parts of property management due to all the unforeseen factors. But according to industry data, the turn cost averages around $1,750. For a full breakdown of turnover costs, check out this article. Finding ways to lower turnover fees and make-ready costs is essential to your bottom line. The best way to reduce the costs associated with turnovers is to complete the make-ready process as quickly as possible. The highest turnover cost is the rent lost due to a vacant unit. So the quicker you can turn over properties and get a new resident moved in, the less it will impact your profits. But how can you lower your average turnover speed?
First, it is nearly impossible to improve a metric if you don’t have a baseline of where you started. We talk to many property management companies who aren’t tracking the speed of make-readies and turnovers. This is detrimental to your business. When you’re not tracking your turnover speed, tasks will fall through the cracks if turnovers aren’t being properly monitored.
Improving your make-ready speed is one of the best ways to lower turnover costs. Review your current rate of preparing a unit for rent. From there, you can set a goal for how much you want to improve your speed. Try to complete all your turns in 7-10 days to avoid losing profit from vacant units. With designated property maintenance software, you can keep track of your turnovers to ensure everything is remembered. Once a resident gives their notice to move out, you can start scheduling repair tasks with your vendors immediately. In fact, with automated property maintenance software, you can assign specific tasks associated with turnovers to be automatically assigned to your preferred vendor. This way, you can complete all your tasks quickly and begin marketing your property.
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