June 28th, 2016
Key Factors Hindering Lease Renewals in the Multi-Family Industry
It is the dream of every property owner as well as property management companies to keep their buildings occupied. However, this is not always the case and it is becoming harder to enjoy continuous lease renewals over time. Two key factors are seen as the main hindrances towards lease renewals, and they are as highlighted below:
Home ownership – More people are transitioning from renting to owning their homes. This means that they are out of the renting market and that number is continuously increasing over time. The challenging part of home ownership is that once a person sets their mind on purchasing their home, it becomes harder to convince them that they should, instead of owning a home, continue being tenants. With the availability of information in the modern day, people are getting more comfortable owning a home yet are unaware of all the maintenance that comes with it. It is up to the multifamily apartment industry to highlight its unique features and to remind current and future tenants that the apartment life is easier; every amenity and maintenance need is already done for them.
Apartment complex construction – Property competition is healthy. It ensures that every property owner and management company is on its toes, ensuring they provide only the best. However, it has been observed that new construction is continuously taking over the market. All of these new buildings more often than not boast modern facilities. For properties that do not boast a contemporary vibe, highlighting the community culture and charming appearance is key to attracting and renewing leases.
Property owners have to come up with strategies to improve the rate of lease renewals. Knowing how to combat the always-changing challenges will mean the difference between losing or keeping a tenant long-term.