Renewal rate is the share of residents who stay when their lease ends instead of moving out. It works like an expense ratio: the lower the leakage, the more of your return stays intact. PAM renews 88.76%. The industry average sits in the mid-50s, and the gap is worth $15,000 to $20,000 per unit over a ten-year hold.
Roughly 30 to 40 property management companies operate in southeastern Wisconsin, and most charge a similar fee. Renewal rate is what actually separates them. A rent collector fills vacancies. An asset manager reduces how often vacancies happen.
A manager who can't report their renewal rate is almost certainly not running the process that produces a strong one. Ask for the number. If it doesn't exist, that's the answer.
Placement fees, vacancy loss, cleaning and repairs all arrive at once. At the industry average, that bill shows up roughly three times per unit over a ten-year hold. At PAM's rate, closer to once.
Measured monthly across the portfolio and reported to every investor.
The best of the rest. Still one to two more turnovers a decade than PAM.
The average cost of a resident turnover in southeastern Wisconsin, all in.
The gap between industry-average renewal and PAM's, per unit, before compounding.
What To Ask Your Manager
Ask for the portfolio renewal rate, how it's measured and how often it's reported. Then ask when the renewal conversation starts for your units. If the answer is 30 days before the lease ends, the turnover has already been decided.
Industry Standard
Mid-50% renewal, and most managers don't measure it at all. Renewal offers go out a month before expiry, often as a form letter. A late payment triggers an automated reminder. The unit goes to market after the resident has left.
PAM
88.76% renewal, measured monthly. A $300 renewal fee charged only as a success fee, when a renewal actually happens. A four-stage calendar that begins 120 days before the lease ends. And a real phone call, not an automated reminder, to any resident who hasn't paid by the 5th of the month.
Day 120: the renewal conversation begins. Day 90: the resident has an offer in hand. Day 60: the mandatory listing date if the unit hasn't renewed. Early notice from a resident triggers a same-day listing. Every step exists to eliminate days without a resident in place.
The calendar also surfaces problems while they're still cheap. A resident concern raised during the renewal window can usually be fixed for a few hundred dollars. The same concern, ignored, becomes a move-out and a $5,000 bill.
A $500 solution to a resident concern identified during the renewal window can eliminate a $5,000 turnover cost.
Score your current manager on renewals, occupancy, placement and fees. If they can't give you a renewal rate, the scorecard treats that as the answer.