Unlocking Multifamily Insights: Tracking Resident Longevity
In the world of multifamily property management, success is often measured by occupancy rates, revenue growth, and expense control. While these metrics are essential, they don't always paint the full picture of a property's health and long-term value. One often overlooked yet powerful performance indicator is Resident Longevity.
What is Resident Longevity?
The Resident Longevity Index (RLI) measures the average length of stay for residents who renew multiple times. Rather than just tracking overall turnover rates, it provides deeper insights into resident satisfaction and retention trends. While turnover rates simply reflect how many units are vacated in a given period, the resident longevity focuses on how long renewals ultimately stay, highlighting patterns of long-term occupancy.
How to Calculate Resident Longevity
Identify long-term residents: A long-term resident is someone who has renewed at least once.
Measure average length of stay: Calculate the total number of months those residents have stayed.
Divide by the number of qualifying residents: This gives the average length of stay (in months) for long-term residents.
Formula: Resident Longevity = Total Months Stayed/Number of Long-Term Residents
For example, if 25 residents have renewed at least once and stayed a total of 1,300 months combined, the RL would be: 1,300/25 = 52
A healthy goal is between 36 to 72 months (3 to 6 years) for stabilized multifamily properties. Properties with lower longevity may face higher turnover costs and operational challenges, while higher longevity often indicates strong resident satisfaction and community. The caveat to this calculation is that it should only be used if your overall retention rate is above 50%. If more than half of your residents are moving out on a regular basis, it could signal dissatisfaction within your resident base and the need to focus on short-term corrective measures.
Why Resident Longevity Matters
Focusing on resident longevity can unlock significant insights and value for multifamily investors and operators:
Community Strength: Properties with higher longevity often have a stronger sense of community, which can lead to lower turnover, lower marketing costs, higher predictability, and more stable cash flow.
Identifies Loyal Residents: Calculating resident longevity highlights your most loyal, and presumably most satisfied, customers, providing an opportunity to gain insights into the factors driving long-term retention.
How to Increase Resident Longevity
Boosting resident longevity requires proactive management strategies focused on resident satisfaction and retention. In essence, if you make a resident feel at home, they will have no reason to leave. Here are suggested approaches:
Enhance Community Spaces: Design inviting communal areas like clubhouses, outdoor lounges, and shared gardens where residents can gather, socialize, and build relationships.
Prioritize Safety and Security: Implement well-lit pathways, secure access points, and visible security measures to ensure residents feel safe and comfortable in their living environment.
Foster Resident Engagement: Host regular events, such as movie nights, fitness classes, or seasonal celebrations to encourage community interaction and create a sense of belonging.
Offer Personalized Touches: Provide welcome gifts for new residents, remember resident milestones (like birthdays and anniversaries), and ensure staff greets residents by name to create a more personal experience.
Cleanliness and Maintenance: Keep common areas, hallways, and amenities clean and well-maintained while responding promptly to maintenance requests to show residents their comfort is a priority.
By tracking and improving resident longevity, property managers can unlock long-term value, reduce operational strain, and foster a more stable, satisfied resident base. Incorporating this metric into regular performance reviews can provide a more holistic understanding of a property's health and guide better investment decisions.