Property Solutions recently targeted a number of our clients for an intensive study on the processes surrounding lease signing and renewals. The responses indicate that, while the multifamily industry is embracing technology more and more in their marketing and resident retention efforts, many use the same labor and paper-intensive practices for lease execution and renewals that they were using decades ago. Here’s what we found:
The survey was conducted from April 15th to April 27th, 2011. The 44 participants represent 36 different management companies, and the average property size of the group surveyed was 329 units, with a median of 255 units.
Lease Creation, Storage, and Signature Logistics
Most management companies still use paper forms for leases. It takes an average of 10 minutes for office personnel to generate each new lease and most leases (90%) are still signed by residents in person at the leasing office.
Although the traditional paper lease continues to rule the day, there are indications that properties are beginning to use some technologies to simplify the leasing process. Of those surveyed, 38% are able to automatically import data from an application to a new lease, 15% are able to accept electronic signatures, and 58% allow prospects to sign their leases remotely. For those who allow prospects to sign their leases remotely, only half allow the signed lease to be returned by email, and the entire remote signing process takes 3 – 5 business days to complete.
ALL respondents store hard copies of leases in a physical file in the leasing office, and 30% store soft copies of the leases in computer systems, in addition to the hard copies already filed.
Manual, paper-intensive systems also dominate renewal processes. Of those surveyed, 15% are still using a manual spreadsheet to track lease expiration dates. Nearly 60% of respondents begin the renewal process 75 to 90 days prior to the lease expiration date. For the initial renewal notification, 88% use flyers that are manually printed and placed on resident’s doors, and 48% use more than one method of contact for the initial notification.
For the majority of respondents, the response rate to flyers placed on doors is only 20% – 30%. The remaining 70% – 80% of residents require 2 – 3 subsequent contacts before a response is received. For the 2 – 3 subsequent contacts, 80% call the residents, and 78% place a flyer on the resident’s door (68% of respondents print a flyer and place it on the residents’ door for both the initial contact and subsequent contacts). One interesting result: although hand-delivered flyers are by far the most popular way to notify residents of an impending renewal, their use does not significantly increase resident response rates.
The respondents estimated that they spend 60 to 90 total minutes on each renewal, not including wait times.
While the industry is more and more likely to use web-based forms for guest cards and rental applications, there seems to be a disconnect between the marketing process and the actual lease agreement. The results of this study indicate a number of opportunities to streamline processes and save time and money by introducing a few technologies into the leasing process:
Data Entry: Importing resident data from the application, and unit information from property management software can virtually eliminate data entry and cut the time it takes each lease from 10 minutes or more to as little as two minutes.
Paper and Printing: All of the properties who participated in our study store paper copies of each lease on-site. Most (65%) also provide physical copies to residents. Moving to online document storage and providing electronic copies of the lease to residents can cut paper use by as much as 85%.
Renewals: Managers can cut both time and paper from the renewal process by setting up an automated system to notify residents when a renewal is due via email or text message. Online renewal signing also removes the need to coordinate a time for residents to come into the office to re-sign their lease. The estimated 67% time savings will allow staff to focus their more time-consuming renewal methods (phone calls, hand-delivered flyers, visits, etc.) on a more targeted group of residents who need the extra attention.
Forecasting: Even when properties allow remote signatures, the process generally takes 3 to 5 business days. E-signatures can reduce the wait time for executed agreements and cut days off the initial lease and renewal process. This translates to a reduce number of units on hold or on deposit at any given time and can increase forecast planning time by up to 30%.
Property Solutions has recently introduced a new online leasing product that includes e-signature and renewal options and integrates seamlessly with our online applications as well as most property management software. Contact your sales rep for more information.