The conventional wisdom of property management is that resident retention, that is, the ability to find a resident and keep them living in the property for the long term, is the goal you should be pursuing. Of course, there are plenty of good reasons to support this, but there are also other situations where typical resident retention may not necessarily be in your best interests.

Here are some of the considerations both for and against resident retention.

Long-Term Stability

The single biggest reason that resident retention is often a sought-after goal for property management is simple peace of mind and economic stability. With good resident retention, a property can have the same resident for years—sometimes even decades—and count on a steady, reliable source of income every month. For many, this is an ideal situation, as this means that the passive income can actually be relied on, and it makes planning and finances much easier.

Economic stability is desirable for the peace of mind it brings. There's a lot of emotional and financial security that comes from knowing residents have every intention of living on the property as long as they can, and dutifully paying on time, every time, when it comes due.

The other side of this equation is, of course, low resident retention, where people tend to move out of properties frequently. The downside of low resident retention is that when no one is living in a property, no payments are collected, and no revenue is generated. There is also the added cost of marketing and promotion to entice new potential residents to decide to live there.

Rotating Residents

The other side of this equation is when you have frequent resident changes. One of the reasons why this can sometimes be a desirable situation is that you can set the terms for payment amounts and keep them competitive with the market, as other factors, such as inflation or changing demand for living space in the area, may make it advisable to raise amounts. It's not unusual for long-time residents to object to raising rent payments, especially if this is something that is done every year. However, with new residents coming in, this does not become an issue, as whatever amount you set is the one they must comply with.

This can be advantageous in certain locales and situations, such as when the goal is to provide student housing. For properties within easy access of a school campus, it's normal to have a yearly rotation of new residents as new students come in and others graduate or transfer to other schools. The fact that there is always going to be an influx of incoming and outgoing students means that while resident retention in the long term is unlikely, you have the ability to frequently readjust your payment amounts as new residents come in.

Whether you decide to pursue long-term resident retention or go with shorter-term residents who frequently rotate depends on your goals and your property's location.

If you want to help ensure your residential property activities succeed, contact Occupancy Solutions and let us help.