Part 2 - What happens if my units are empty for too long?

In part one of this series, we looked at how long periods of low occupancy can impact operations and maintenance. In this second part, we’re going to look at the impact on existing residents and the building community.

For building owners operating in multifamily, co-living, PBSA or BTR properties, community is undoubtedly the foundational building block to your asset’s potential.

For the residents themselves, a buzzing atmosphere, friendly neighbours, and a busy social events calendar can contribute to higher likelihood of longer-term renting, and even boost mental health. A community dynamic is a huge selling point for renters and a neighbourly atmosphere could be the key to securing long term rental contracts.

Let's take a closer look at the value of a community, and just how detrimental a reduction in filled rooms could be to the societal dynamic in BTR properties.

Low attendance levels

Your property might host social events to bring the community together and boost the social dynamic. But a lack of tenants will predictably result in a lower footfall at those events.

Have you ever been to an event with a poor turnout? Am I right in assuming it wasn’t that enjoyable, and you probably weren’t in a rush to return?

Low attendance at your events perpetuates an ongoing cycle of the same thing because tenants assume they’ll be one of a few attendees. This type of behaviour is impactful to your building in more ways than one. It opposes any efforts to boost the community vibe and bring neighbours together and could also have a significant impact on your brand’s reputations. Events are key to growing your brand image and promoting the type of dynamic your property represents. If this area continues to be unsuccessful, it's difficult to pick up footfall again. A steady flow of residents keeping occupancy levels high should help you avoid this.

Staffing issues

A reduction in residents can lead to problems with staffing. Staff are an expensive resource and reducing staff might seem like the only option to negate the shortfall in income. But we’ve all felt the experience of an understaffed facility at one point or another. Strained and overworked employees can’t perform at their best or deliver customer service at the standard expected. This ultimately leads to dissatisfaction amongst residents, and unhappy residents puts retention at threat.

Lack of atmosphere

Atmosphere is a huge selling point for potential residents. And while some residents may prefer peace and quiet, a building with almost every other room empty, or floors full of voids, is likely to feel eerily quiet. The lack of atmosphere and feeling of not having any neighbours drains any sense of community and could be the driving force behind existing residents leaving.

Loss of resident retention

Have a quick google of the term ‘neighbours’ and you’ll be met with a whole host of negative content and connotations. Usually preceded by the term ‘noisy’ and accompanied by terms like ‘nuisance’ and ‘disputes’, neighbours in the UK tend to have a bit of a bad reputation. But that’s not the case for everyone. And particularly in coliving and multifamily spaces, neighbours can play a huge influence in the longevity of a rental term. Having a community and friendships with other residents is more likely to result in longer term commitment to renting.

Families living in rented accommodation blocks may not have the finances or circumstances to enable them to participate in the stereotypical cul-de-sac/suburban living so many families strive for. But their children still want to have friends close by and someone to walk home from school with. Having a full and vibrant community again promotes renter retention and secures more long term lets. When families are happy in their spaces, it’s more likely to attract more of the same.

Mental wellbeing of residents

Healthy, happy residents are crucial to your building dynamic and community. According to research by Lloyds Banking Group, for the majority of Brits, (71%) neighbours have a positive impact on our mental health. For those aged 18-34 are more likely to be making new solid friendships with their neighbours. This age range is critical for PBSA and BTR operators and may well attract Gen Z into committing to longer stays.

Long term lets

While we advocate for short term rentals to fill empty units and boost your income potential, there’s a lot to be said for a community of long term lets. A long-term community is settled into the building, they respect and contribute to the community in a meaningful way. They understand the dynamics, and it’s part of the reason they commit to the property. Without that dynamic, a lack of long term (and short term lets) could leave you with an unpredictable business model.

A neighbourly atmosphere, with lights on and floors of filled rooms promotes a welcoming and buzzing ambience that is attractive to potential investors and generates further interest from tenants. In a co-living or multifamily space, relationships with neighbours are a huge factor in tenant retention. Keeping the building full, with long term lets or short term lets to bridge gaps between tenants will be vital to maintaining the investment potential of your building.

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