EP#27 Dom Beveridge | Why Is Renter Turnover So Low?
Mar 27, 2025
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Dom Beveridge, founder of 20 for 20 and a leading voice in proptech, joins the discussion on why renter turnover remains surprisingly low. He dives into rental market trends post-COVID, revealing that retention rates are now at 56.3%. The conversation also explores how technology is redefining resident satisfaction and operational efficiency, plus the buzz surrounding advancements like AI. Beveridge shares insights from his annual report, shedding light on impactful trends shaping the multifamily industry.
Retention rates for rentals have significantly risen due to stabilized rental costs and a preference for stable living environments.
The paradox of increased apartment supply reveals that many renters are upgrading to higher-quality properties while choosing to renew leases.
Technological advancements in property management are enhancing tenant experiences, which may contribute to improved retention rates through better resident satisfaction.
Deep dives
Rising Retention Rates in Rental Housing
Retention rates for apartment rentals have reached their highest levels in nearly three years, with a recorded rate of 56.3% in February. This marks a significant increase compared to pre-COVID averages, where the rates generally hovered between 49-54%. Numerous factors contribute to this unexpected trend, including a perceived stabilization in rental costs and ongoing preferences for stable living situations. Even in a climate of increasing apartment supply, many renters are opting to stay in their current residences, defying earlier predictions that high retention rates would decline.
Impact of Supply Wave on Renters
The ongoing influx of new apartments poses a paradox where higher supply does not translate to increased turnover. Instead, the current rental market is witnessing a filtering effect where renters are opting to upgrade to more desirable properties while still renewing leases. Notably, renters previously in class C units are moving to class B, demonstrating a trend of upward mobility within the apartment market. This behavior indicates that beyond supply, structural changes and preferences shaped by the pandemic have led to reduced mobility among renters.
Regional Variations in Retention
Retention rates vary significantly across different metro areas, with traditional slower-growth markets in the Midwest and Northeast showcasing the highest rates. Conversely, rapidly growing markets in the Sunbelt and mountain regions exhibit more transient populations and, thus, lower retention rates. For instance, cities like Austin and Denver have consistently shown lower retention, which aligns with their fast supply growth. Interestingly, even markets not traditionally known for high retention, such as Miami, are now experiencing shifts that warrant close observation despite their challenges.
The Role of PropTech in Tenant Retention
Technology advancements in property management are contributing to improved tenant experiences, which may also lead to enhanced retention rates. The integration of sophisticated resident portals, streamlined communication processes, and gamification tools has made lease renewals more frictionless. Moreover, the increased emphasis on Net Promoter Scores and resident satisfaction metrics reflects a significant industry pivot towards prioritizing residents’ needs. This enhanced focus on technology usage underscores a broader industry trend that may further optimize tenant retention strategies in the future.
Influence of Consumer Confidence on Housing Decisions
Consumer confidence levels appear to play a role in influencing renters' decisions to stay in their current homes rather than exploring new options. As confidence wavers, individuals may opt for stability rather than make significant life changes like moving or purchasing a home. This seemingly inverse relationship between economic confidence and mobility impacts overall retention rates, suggesting that even broader economic sentiments can substantially affect the housing market. Thus, fluctuations in consumer confidence could provide valuable context for understanding current rental trends and retention behaviors.
Rental housing economist Jay Parsons dives deep into a topic that is far more nuanced than it's typically given credit for: low turnover among renters. Nearly everyone wants to give all the credit to the lack of move-outs to buy single-family homes. And certainly that's a factor, but is it the only factor? The data suggests it's just one of several factors at play. Jay examines other factors that help explain why turnover has been unusually low throughout these past five years — even back when home sales were booming. Additionally, Jay brings in multifamily proptech guru Dom Beveridge for a conversation on the evolving role of technology in resident satisfaction and retention, as well as leasing and staffing efficiency. How do we separate real advancements from buzzy vaporware on hot topics like AI and centralization? Dom shares highlights from his latest 20for20 report offering intel from apartment executives on real technology trends impacting property owners and managers. And as always, Jay offers up recurring features like "In the News" and "Rental Housing Trivia."
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