Maximising rent collected in a residential building usually boils down to one core element: keeping the tenants in situ happy. The more “at home” they feel, the more likely you are to retain their custom, which means:
Accepting rent increases
Minimising revenue lost through void periods
You won’t have to spend time and money finding a replacement tenant
Your staff can continue to build on their relationships with existing tenants (which can be very useful for resolving issues quickly and calmly)
For a great number of renters across PRS, PBSA and BTR, tenant amenities play a huge part in their happiness. According to research by Knight Frank and UCAS, 91% of students claimed the facilities on offer influenced where they chose to live.
Adding further support to these findings, Savills discovered the main reason why tenants moved out at the end of their agreements was down to finding a better quality property.
It’s clear that tenant amenities have a huge effect on a renter’s decision on where to live and whether to renew their lease, but why is that? We discuss why facilities create such an impact.
Tenant Amenities Create Value For Money
Rent in the UK isn’t cheap. The latest values updated for 2021 have estimated the average monthly cost at £868 for private renters. Taking the average UK salary of £30,800, it means most tenants are spending over a third of their wages on rent every year — a total of £10,416. In London, it’s not uncommon for private renters to pay over 40% of their wages to their landlords.
When you look at the figures, it’s no surprise that tenants want to get the most value for their money, and many of them find this value in the building’s amenities.
A gym, outside space, a concierge service, security; these are common facilities and services, but not every residential building delivers on these needs. Attracting new tenants to pick your property and pay a premium boils down to differentiating amenities.
Standard residential buildings bring in much lower rental figures because the managers and operators make no pretence about what the tenant is getting. If a tenant is being asked to pay a premium for services not rendered, the chances of them renewing their lease drop drastically.
Tenant Amenities Are Convenient
Think about the type of tenants in your residential building. Most of them will be young professionals, working in bustling city centres. In fact, research from Built Asset Management found the average age of a renter in co-living accommodation is 28.2 years.
The majority of their day is busy and hectic, and the last thing they want is more hassle in their lives. Take the following scenario as an example:
Your tenant has had a long day at work. They’ve finally come home, sifted through their post, thrown away the junk mail, and now they’re looking at a notecard from Amazon or the Royal Mail saying they’ve missed a delivery. But it’s okay because the courier will try again tomorrow… when the tenant is once again at work.
In BTR developments, you’re not just offering tenants a place to live, you’re giving them a favourable lifestyle that works around them. Anything that makes life that little bit easier for tenants is always going to go down well. Whether that’s something as large as a 24-hour downstairs restaurant, or simply guaranteeing you have the means to take in every parcel they’ve ordered, convenience is key.
Do Tenant Amenities Affect Ongoing Costs?
When we’re talking about tenant amenities, the subject of cost comes up regularly.
As an example, if you’re providing residents with a gym, the running costs for your residential building are going to climb. The price of equipment, electricity costs, the extra cleaning involved; it all stacks up. However, tenants are usually willing to pay a touch more providing they get a quality service they’re going to use.
Not every tenant will want to use the gym, but almost everyone these days — particularly in the younger adult age groups — buys items online. According to the Office of National Statistics, internet sales shot up to represent 32.8% of all retail sales in May 2020, a staggering 174% increase on the figures from 2019.
If you provide a service that will be universally used by tenants, the costs are justified, and most tenants will be happy to pay a premium for the convenience.
Naturally, this will have an impact on lease renewals. Private renters will weigh up the amount they’re paying for amenities by how much use they get out of them. If it turns out they’re using your parcel services regularly and not encountering any problems, they’ll keep this in mind when it comes to signing on the dotted line again.
What are the Top Tenant Amenities?
We’re big advocates of providing the people with what they want. If we don’t, then someone else will, and that’s the attitude you also need to have when it comes to providing a quality place to live.
So what are the top tenant amenities?
Parcel rooms see the most use and provide an unparalleled service to residents, staff and even the couriers themselves. But one high quality facility isn’t enough to persuade renters to sign a lease renewal.
If you really want to stand out, consider offering and installing the following tenant amenities and services:
Outside space (even if it’s just a roof terrace or balcony)
Reserved parking spaces
High speed internet
Smart home features
Community event space
On-site cafe or restaurant
You could also employ a concierge. With a concierge, you’ll be able to upsell a greater variety of convenient tenant amenities such as:
Making reservations and arranging transport
The National Build to Rent report 2021 found that having a concierge in your building resulted in an average 4.8% higher star rating. That could be the deciding factor in attracting new residents and convincing a current tenant to sign a lease renewal.
What Else Can Affect a Lease Renewal?
Tenant amenities have a huge impact on the lease renewal process, but there are other factors to think about as well. In short, residents are looking for three things from their accommodation:
Value for money
Quality living conditions
An easy life
Every aspect of your residential building should help cement the lifestyle your tenants are looking for, which is why you should also invest in the following:
Friendly & Proactive Staff
Managing multi-tenanted properties is more than just looking after the building, it’s also about people management. Happy residents are ones that will stay for the long-term, and your team is instrumental in creating a rapport with tenants.
It’s the simple things which can have the biggest impact. A smile and “good morning” can brighten up a resident’s day, offering to help carry a few bags or boxes up to an apartment if a tenant is struggling, and even holding the door open are all everyday gestures which show you care for your residents.
Naturally, a well-trained employee is going to be the most reliable, so don’t forget to host regular training sessions with your team. This can include going over the basics of customer service to teaching staff how to use any new systems that have been implemented.
Sustainability is a hot topic in every industry, and the residential sector is no different. If you’re looking to improve your lease renewal rate, you need to make sure you’re keeping up with the times.
Individuals want to be associated with brands that are seen to be doing good, so make sure residents know when you’re implementing something that will lessen the impact on the environment.
The smart home features we mentioned earlier can help reduce carbon emissions in each apartment, and a BMS (Building Management System) and CAFM (Computer Aided Facilities Management) system will help save energy across your entire building.
You can also source furniture from reputable suppliers who use natural materials where possible and have recycling schemes in place for damaged or unwanted pieces.
Will Every Resident Re-Sign?
There are always going to be residents who move out for reasons that have nothing to do with your building. Priorities change, and someone may move out because they’ve taken on a new job or they’re starting a family and need more space.
But them moving on doesn’t have to be a bad thing. A “Bon Voyage & Good Luck” gift pack will let your former residents know how much their time in your building has been valued. This can lead to good publicity.
A quick snap and an upload from the former tenant to Instagram or Facebook will paint your development in a positive light. And it also advertises to their friends and followers that a unit is now available.
So, don’t be disheartened if a few don’t sign a lease renewal. Turn it into a positive, and get ready to welcome a brand new resident.
How Will Parcel SafePlace Impact Your Lease Renewals?
If we’ve established anything in this blog, it’s that keeping private renters happy is the answer to achieving more lease renewals when a tenant contract comes to an end. You do this by giving them precisely what they want, which happens to be:
Value for money
Products and services they’ll use regularly
A secure parcel collection service is one of the most requested tenant amenities that private renters want, and Parcel SafePlace gives you the means to provide tenants with what they’re asking for.
Our system is simple to use. With a quick snap of the parcel label using our mobile-friendly tech, the PSP system will notify residents when their delivery has arrived. All they have to do is collect it from a secure room at their leisure with the one-time-use code that will be sent to them.
Even if you don’t have the space for a package room, our PSP Lite service still makes keeping on top of deliveries a breeze. Take a look at the details, and see if you qualify for a free two-month trial period.
Lease renewals greatly depend on how much tenants like living in your residential building. For a tenant amenity that can improve your chances of achieving more lease renewals, get in touch with the Parcel SafePlace team.