As real estate investors, it’s easy to get wrapped up in our own world. Buying, renovating, networking. We get so zoomed in and focused on our stuff that we miss out on some of the key details that can get us ahead in this business.
Before you go any further, take note of the words I used in the title. So often, landlords, management companies and accidental long-term investors use words like renter and tenant to describe the persons living in their properties. Certainly, there is nothing wrong with using either word. They accurately describe the process and have always been used by real estate investors. For our part, Memphis Invest has changed the terminology to resident.
We refer to all of the occupants in our properties as residents. Why? It changes the mindset not only of the resident, but also our team. It invokes respect. We use it in our contracts, during our phone calls and in all of our interactions. It has dramatically changed the culture and atmosphere at each of our offices. It has greatly improved our relationships with our residents and all of it is due to one little change in the words we use.
Every investor, no matter where you are, faces competition in some way or another. Even if you don’t know them face-to-face, there will always be other properties and even multi-family properties competing for your residents.
Knowing that there’s competition for us all means that the little details matter. If you knew you could get ahead by getting into the mind of a resident and deliver exactly what they were looking for, why wouldn’t you?
These are just some of the things that residents today are facing, what they value, and how you can get a leg up on the competition when you take the time to figure it all out.
3 Ways Understanding Residents Can Give Investors a Leg Up
Knowing Your Customer Improves Your Investment Strategy
Investing in real estate shouldn’t be treated unlike any other business. Like any other business, there is marketing to be done. The best way to advertise your properties, decrease turnover, and meet your target demographic is to know them and know what they want. What motivates your residents? Why are they renting instead of buying? What do they value most in a property or even in a management experience? What are they looking for in life?
That might sound too existential, but part of getting to know the resident mindset means getting a little psychological and drawing some correlations. For instance: if you’re renting out a property in a college town, mostly to college kids and young professionals, your turnover is probably going to be a lot higher than someone in an area that predominantly rents to young families in a good school district. Can there be advantages to both? Absolutely. But it affects your strategy. It won’t be universal. Knowing the nature of the tenant will help you better anticipate and fine tune your strategy.
Understanding Resident Issues Creates Urgency & Empathy
At Memphis Invest, one of the things we talk a lot about is the value of customer service. It really comes into play when we’re talking about residents. As your customers, their issues matter. For you, that can mean the urgent issues that can plague a resident’s life: burst pipes, broken appliances, pest problems, and other typical maintenance issues.
Understanding that these issues matter and are a real cause of inconvenience, discomfort, and angst for you resident (ie. customer dissatisfaction) should help move you or your management team into quick action.
But let’s expand. You’re the owner, you’re not really involved in the nitty-gritty maintenance issues. What about big picture resident problems? What if they value the convenience of paying rent online, but you don’t offer it? What if they’re struggling with rent affordability in the current economy? What if what they really want is someone to answer the phone and actually get back with them when they have issues!!
One of those can be solved: offer a new amenity. The other really can’t be solved by you, because you still have to charge rent at a competitive price. However, understanding that residents are feeling discouraged about home buying is certainly something to keep in mind. What can you do to help your residents love renting? Highlight your amenities. Be quick and responsive. If they resent renting, they’re going to be more likely to try to change their situation, even if that’s just hopping to another rental.
Targeting Pain Points Gives You A Distinct Draw
Reiterating: customer service is one of the most powerful tools at your disposal. As a real estate investor, providing excellent service and services is the number one way to set yourself apart from the crowd.
Remember this, though: most of your competitors are going to be reactive to the needs of their residents. You can be proactive. Most don't care about the way they talk to renters. To your competition, they are simply tenants. Treating them well or offering amenities is the last thing they are going to value as a company.
If you take the time to address the pains and problems of your renters before there’s ever a problem, it just looks like you’re providing the best service they’ve ever had. Know their pain points. Target them outright. For your market, that can look like a lot of different things. Here are just a few considerations:
- Fenced-in yard for pets and/or children
- Home security system
- Updated appliances and hardware
- Routine visits from an exterminator
Not all will be needed or necessary in your market. Regardless, getting ahead of your residents’ needs and anticipating problems before they happen is a key strategy for long-term retention.
Ultimately, considering how residents think, what they need and want, and how you can best address their mindset is how you can set yourself apart from the competition. If you don’t know where to start, start with great customer service: something Memphis Invest can help you with.
Want to learn more about how Memphis Invest changed the Property Management Industry and became the Gold Standard for Customer Service for Passive Investors?