Ours is a business of cycles; and believe it or not, the time is going to come again to raise the rent.  In case you’ve forgotten what that’s like, let me remind you that just like every great relationship, the one between you and your residents requires a carefully maintained balance of give and take.  When they signed the lease, you agreed with them that you’d take a specific amount of money in return for giving them a specific range of features and benefits.  Imagine those elements on each side of a scale.  It’s important to remember that the rental rate your residents are paying to live in your community is not an insignificant part of your relationship with them … for many, price is the hottest button of all.  If you’re going to ask them to put more on their side of the scale, you’d better be prepared to define what you’re putting on your side, too, to keep the balance in place.

Now, we all know that every resident is a valuable one.  Not only have you already invested a great deal of time and money and good will—all of which makes that relationship well worth keeping—but losing the relationship will almost certainly cost you more than just the status quo thanks to turnover and marketing.  We never want to reduce the value of our residents to a dollar figure alone; nonetheless, they represent more to you IN that apartment than out of it.  So, how do you propose something as significant as a rent increase without throwing off the balance you’ve worked so hard to create?  There are many proven strategies for raising rents without losing renters, but in our experience, there are a few elements common to all the most successful ones, and they are:

Keep It Real

Remember when you were a kid and you asked your mother why she was making you do (or stop doing) something, and she said “Because I said so!”  You hated that, didn’t you?  Nobody really ever outgrows that.  Add to that the trend of consumers desiring increased transparency, and you might as well just plan to deliver the “why” along with the “what” if you expect them to accept your call for higher rent, and it had better be good.  Be up front about the fact that raising rent is a business decision, the cost of operating your community is continually increasing, and rental rates have to keep up in order for your community to stay successful.  It’s important to couch that in the fact that the key measurement of your success is maintaining a relationship with them.  Your success means being able to continue delivering the features, benefits, and level of service they have come to expect, and absolutely deserve; and that’s where this next part comes in.

Keep The Faith

“Business is business” is only going to get you so far; and frankly, that’s not far enough in a realm where emotions play a leading role.  Your resident didn’t choose your community just because it made great business sense … they were also relying on their other senses.  They liked what they saw, enjoyed what they felt, and believed what they heard when you promised your community’s features, benefits, and services would keep them satisfied better than any other community they might choose.  In the best case, they might have had the word or experience of a trusted friend or colleague to reinforce that decision; but they had no personal proof at that point that you’d live up to those promises until they made their choice and moved in.  If you haven’t been delivering, then good luck with that (there’s a reason we called this part “keeping” the faith … if you’ve lost it, then you need another article entirely).  Of course, if you’ve been delivering at least what you promised, then you’ve demonstrated that their faith was well-placed, and there’s powerfully persuasive value in that.  Build upon that base of faith by reminding them of all the things upon which their original decision was based and that they receive as a resident (a sense of community; clean/comfortable and attractive environment; convenience; amenities; maintenance and other services that keep their life carefree; a professional management staff on a mission and at their service; and the specific things your community offers that the competition can’t claim.  Now, if you’ve been overachieving and exceeding their expectations, you’ve got a powerful ace up your sleeve.  There could be no better time to spotlight the things you’ve been doing that go over and above what you originally agreed to provide.  Added new services?  Upgraded amenities?  Renovated lately?   Those are all valuable items to add to your side of the scale.

So at this point, you’ve explained that you need to raise the rent and why, you’ve reminded them of why they chose your community in the first place, and you’ve maybe even had a thing or two to add to your side of the scale.  It’s time to close the deal, asking them to renew at the higher rate.  You’d never dream of presenting a leasing demonstration without being able to proactively address those concerns, so enter this discussion armed with the same set of skills.  Here it’s important to realize the difference between many of the objections you might have encountered in the original lease process where the resident may have been looking to buy more time or a better deal… strategically, those are offensive moves meant to gain higher ground.  Asking someone to pay more for something they’ve been getting all along is going to place them on the defense, geared to protect something they perceive to be slipping from their grasp. (“Why pay you more when there’s lower rent down the street; and what’s to stop me from packing up and going there?”)

Of course, you know the answers to those questions, so keep them at the ready.  For starters, the cost of moving is high—almost always more than estimated, not to mention the emotional toll of making such a huge change. Those other communities may be luring residents in with lower rent but will eventually have to make the same rent-increasing business decisions that you’re making.  Their level of commitment to meeting and exceeding their residents’ expectations is an unknown value while yours is a proven one.  You have an established relationship with them that you value and intend to uphold to a degree that’s at least in keeping with the increased rate of rent, and with a goal of exceeding it every chance you get.

Keep The Resident

To sum it all up, the most powerful tools you have in raising rent without losing residents are to be clear about what you’re asking and why; and pull out all the stops when it comes to defending your value—all in the spirit of continuing the valuable relationship to which you’ve both contributed up to this point.  If you’ll make those things part of every strategy to increase rents, you’ll keep more residents as a result.

And finally, there’s so much more to be said about successfully raising rents than we could ever fit into one article, so if you want to know more, plan to attend “Million Dollar Listing: Proven Strategies for Raising Rents Without Losing Renters” at Brainstorming 2010 where you’ll learn:  how to effectively demonstrate the value of your community (including features and benefits that are often overlooked); the latest services and amenities that residents want and are willing to pay—or pay more—for; how to outshine the competition and position your community as the best possible choice; leveraging the full value of your brand; the dollar power of outstanding customer service; why a strong sense of community matters; and much, much more!  We’ll see you there!