3 Ways to Build & Retain The Best Leasing Team
Every day a unit sits vacant is a day of lost revenue. Look at that loss over multiple days across multiple units at multiple properties… it adds up. That’s why an experienced leasing team is essential to every multifamily operation. But finding and retaining leasing talent is a challenge.
The best leasing agents not only know how to quickly turnover units, they also identify qualified residents and upsell the property. This turns resident turnover into an opportunity to increase revenue, not stress about occupancy.
In today’s multifamily industry, the leasing position is an entry-level role with yearly turnover over 36%.1 In fact, the majority of properties have untrained leasing agents making minimum wage. They’re learning on-the-job with little oversight and few incentives, and if they manage to succeed, they move on to bigger and better opportunities. This has become the status quo in our industry, and according to a recent survey, staff retention and satisfaction is at the bottom of the priority list for most owners.3 That needs to change.
It’s time property owners and operators see how undervaluing leasing is resulting in missed revenue opportunities, high turnover costs, and ultimately a less valuable asset. To bring stability to your business, you need to bring stability to your leasing team. Let’s look at three ways to build and retain the best leasing team:
1) Build a Career Path for Leasing Agents
The average multifamily property is ~250 units managed by a 3-person team. Most teams have the below structure:
This structure offers no upward trajectory for the leasing role. It is merely an entry-level position that acts as a stepping stone to property management. That’s a problem, because it creates a talent vacuum—people who excel at leasing stop contributing to leasing as soon as they’re promoted.
Owners and operators need to create space within their organization for leasing talent to grow. In our opinion, changing the Assistant Property Manager role into a Leasing Manager role is the best solution. This position can still support the property manager day-to-day, but the primary responsibility should be mentoring and supporting the leasing team. This change not only retains successful leasing agents by providing a growth path, but also maintains critical institutional knowledge within your organization.
Turning leasing into a viable career shows how much you value this skillset. Inexperienced talent is no longer siloed, but instead supported by experienced management. And experienced agents know who they can turn to for help during particularly busy months. As the first point of contact for residents, it’s crucial to keep these team members satisfied. Which brings us to our next point…
2) Create Value by Valuing Talent
56% of renters said the professionalism of the rental office was the biggest driver to leave a review, and 79% said they will not visit a property if reviews are bad. That’s why avoiding burnout amongst leasing staff is critical to a property’s success.3 And yet, so many properties throw leasing agents into a sink-or-swim environment. With little to no training, these employees run one of the most time-consuming and critical functions of a property, while also taking on countless other responsibilities handed down by property managers. The role is too easily overwhelmed, and therefore subject to dissatisfaction and high turnover.
Keep the role focused strictly on leasing—promoting the property, fielding calls from potential residents, touring the property, and closing deals.
To bring stability to the leasing role, we recommend defining clear job responsibilities. By doing so, the agent can own this role within your organization. And in their limited spare time, they can upskill through training. Moreover, assigning a manager to oversee the agent’s performance ensures they’re meeting expectations and shows you’re invested in their success. According to the ADP Research Institute, team members who said they trusted their team leader were 12x more likely to be fully engaged at work.1
Owners and operators also need to recognize the importance of financial incentives in retaining talent. Talented leasing agents are sought after, and because base pay for the position starts at minimum wage, they’re incredibly responsive to changes in compensation. Even an additional dollar per hour can make a difference on whether or not they stay. To retain talent, you need to reward their success. Setting clear goals overseen by a manager not only improves satisfaction, but more importantly, it’s the key to creating an incentive structure tailored to the needs of your organization. And if talent is ever dissatisfied, management is in place to respond to their needs. It may seem costly, but consider this: replacing a salaried employee costs 6-9 months of their average salary.2 Not to mention, you’ll also pay for lost productivity—slower turnover on empty units—as you search for and train a new hire. That’s why it’s important to consistently evaluate how your incentive structure is impacting your bottom line.
If you weigh the costs of rehiring and retraining the position as well as the impact on missed revenue opportunities, you might find that paying more can actually result in a net positive for your business.
3) Achieve Desired Outcomes by Sharing Goals
The idea of leasing making an impact on the bottom line is crucial not only for owners to understand, but also leasing agents. Today’s agents rarely have insight into a property’s P&L, and so they never see how their work can make a difference. Giving your agents more context into your business sets them up to be better salespeople.
Setting weekly meetings to review pain points, define KPIs, and identify upcoming challenges is the key to long-term success. This responsibility hinges on designating some form of management, and if you haven’t noticed, it’s an essential part of our recommendations. But by bringing transparency and oversight to the leasing position, you can trust that this role will be ready and empowered to make the best decisions for your business. Plus, consistent meetings provide a venue for teams at the ground-level of your organization to recalibrate their goals based on how the overall business is performing. In short, inviting the leasing team to take ownership over the revenue of your property—finding opportunities to turn resident turnover into growth—is the secret to building long-term value.
Consistent positive income is achievable, but it requires a leasing team that is properly managed, trained, and motivated. Once a stable and experienced leasing team is in place, the uncertainty associated with resident turnover will decrease—meaning your asset is exposed to less risk. This opens the door for owners and operators to access more favorable lending terms, earn greater returns, and ultimately achieve a higher valuation at sale. This long-term success cannot be achieved by ignoring the problems plaguing leasing teams. It requires attacking the structural problems of our organizations and investing in changing the status quo.
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1) “ADP Study: What Is Impacting Your Employee Engagement?” ADP, https://au.adp.com/resources/articles-and-insights/articles/a/adp-study-what-is-impacting-your-employee-engagement.aspx. Accessed 5 November 2024.
2) “Employee retention: The real cost of losing an employee.” PeopleKeep, 16 April 2024, https://www.peoplekeep.com/blog/employee-retention-the-real-cost-of-losing-an-employee. Accessed 5 November 2024.
3) “How to Lower Employee Turnover in Property Management.” Zego, https://www.gozego.com/articles/lower-employee-turnover-property-management/. Accessed 5 November 2024.
4) Shames, Nate. “The Solution to Leasing Agent Turnover.” EliseAI, 27 January 2023, https://www.eliseai.com/blog/the-solution-to-leasing-agent-turnover. Accessed 5 November 2024.
