Last modified on March 20th, 2023
By Matthew Kaddatz
According to the NMHC Quarterly Survey of Apartment Conditions, 66% of businesses say that apartment market conditions in their local markets are looser than three months ago, which means this year’s leasing season will be more competitive than ever. Between slowing rent growth, rising inflation, and new apartment construction developments entering the market, now is the time to evolve your leasing and retention strategy to make the most of demand. Read on to find out the key performance indicators (KPIs) you should be tracking and how to optimize your leasing flow to turn leads into leases faster.
What is an optimal leasing flow?
While each property management business’s leasing flow may look slightly different, there are certain steps everyone should follow to successfully convert leads to leases. An optimal leasing flow — one that fills vacancies quickly — should look like this:
- Advertise units
- Communicate with leads
- Schedule showings
- Process applications
- Screen tenants
- Sign leases
- Help manage the move-in
To further optimize your leasing flow beyond these steps, you should monitor several KPIs. KPIs are important to evaluate on a regular basis, as they help you to better understand the health of your business and how you stack up to your competitors and/or the previous year.
Top three leasing KPIs property managers should track
KPI 1: Leasing performance
The first and arguably the most important KPI you should track is your leasing performance, with the goal of identifying which leasing agents are attracting the most leads and establishing the ROI of your leasing efforts. When measuring leasing performance, there are a few metrics you should keep in mind, including:
- Leasing activity: You need a tool that can show you the total number of leads, showings, applications, and leases. Having technology that tracks this for you allows you and your staff to identify outliers and pinpoint areas for improvement to maximize your efforts.
- Inquiries by source: You need to be able to attribute the number of prospect inquiries for specific units, properties, or campaigns to their source (such as listing sites) so you can evaluate the ROI of your marketing efforts and ensure you’re getting the most out of your marketing spend.
- Future occupancy: You need to measure leases needed to reach your 95% occupancy metric with leasing conversions so that you can give your leasing teams tangible targets to meet occupancy goals and reduce days vacant.
KPI 2: Turn performance
The second KPI you should track is unit turn performance, with the goal of turning each unit as quickly as possible. Unit turns can be challenging, as a lot of work goes into transitioning an apartment or single-family home from move-out to move-in ready. Some ways you can put technology to work are by using a single system that allows you to track turn tasks across units, coordinate vendors and timing, and manage turn-related documents. If you’re relying on multiple tools to manage unit turns or are still using paper-based processes, consider transitioning to a fully digital system so you can increase visibility and turn units more efficiently.
For instance, with AppFolio Property Manager, you can post recurring work orders to a unit turn, generate unit turn detail reports, check the status of unit turns across properties, and communicate with vendors right in the platform.
KPI 3: Renewal performance
The final leasing KPI you should track is renewal performance, with the goal of removing friction in the renewal process. Maintaining occupancy is essential for success. It is far easier and more profitable for your residents to stay, as this avoids vacancies, expensive and time-consuming turnovers, and the need to spend money on marketing to attract new renters. Ideally, you want to make the renewal process as streamlined and easy as possible for your residents. Below are five steps you can follow to strengthen your renewal strategy.
- Provide flexible lease terms by allowing residents to choose the best offer for their needs.
- Consider flat rate renewals to decrease the risk of maintaining rent in order to maintain occupancy.
- Bring renewals to the renter — send, track, and countersign lease renewals online with an online portal.
- Reach out to your residents before their lease ends to see if they’d like to renew. Automatic digital reminder emails can really help with this process.
- Use data to your advantage by creating a renewal summary report so you can see your renewal performance over time.
Leasing season is always a busy time of year for your teams; however, when you leverage automated and online tools, you can optimize your workflow to turn leads into leases faster. A comprehensive leasing platform, like AppFolio, can help you and your team reduce the number of days your units are vacant. To learn more about how you can streamline your leasing operations, take a look at this guide.