On average, building managers give up $5000 in lost revenue for each tenant they fail to retain. But there's a way to reverse turnover, and it doesn't involve more amenity spaces, resident perks, or heavy overhead through management-run socials.
"We're always going to have resident turnover. But most turnover is not only bad, but something you can directly control." – Jen Picotti, COO, MangInc
Picotti isn't alone in understanding this trend. Dan Lieberman, President of Milestone Properties in Berkeley, California, says that 70% of turnover is controllable. That's because tenants heavily factor community into their apartment decisions, and property managers who understand this have an unfair advantage in today's real estate landscape.
In the past few years, turnover rates have skyrocketed. Part of this is due to millennials and Gen-Z, a generation of transient renters, entering the market. But these renters are most driven by longing for a sense of community.
Loneliness has become a generational problem. Heavy use of social media, a shallow , has been a core driver of this trend. Younger generations in the 22 to 35 age range feel more alienated and lacking social connection than ever before. 43% of this demographic experiences chronic loneliness.
Building a sense of belonging into your community can skyrocket retention rates.
“People will pay up to $200 in rent increases if their friends are living in the same community. They are willing to stay there because their entire lifestyle is there.”– Laurie Lyons, EVP, U.S. Residential
Of course it's easier said than done. How can managers build an organic sense of community in their buildings? Management-run socials don't seem to work. Residents congregate, but don't actually interact.
Managers previously tackled this problem by setting up referral programs for their existing tenants. Residents refer their friends, who then become their neighbors, organically drawing in a community.
But this approach falls short for the tenants who have just moved to new cities, the ones most likely to turnover.
Imagine you've just moved to a new city, and you don't know anyone. You work 9-5, come home, and order take-out while watching Netflix in your apartment. That's the reality for new tenants in new cities.
gathr has built a social events platform for residents to organize and attend small group socials with their neighbors. It allows property managers to facilitate neighbor-to-neighbor socials as community-building traditions. Amir is hosting poker nights on Mondays. Hannah throws board game nights on Tuesdays. Greg hosts NFL watch parties on Thursdays.
Each of these have become weekly routines in our pilot partner buildings. When it comes time to re-sign their leases, the choice is obvious for our residents: they stay in the building where they’ve built a community, the one that feels like home.
We're passionate about building a sense of belonging into the spaces we live, work, and play. And we believe the world will be better for it.