Property: 220 units, Phoenix, Class B+ The PM sent the Q3 renewal report: 64% renewal rate. My first thought: "Solid. Benchmark is 60-65%. We're good." Then we got on an LP call three months later. NOI was $23K behind budget. Occupancy hit target. Renewals hit target. But the P&L was bleeding. So we went back and segmented the 64%. Here's what we found: ――――――――――――――――――――――――――――― QUALITY GAP: • Top quartile residents (paying $1,300+): 51% renewal • Bottom quartile residents (paying <$1,050): 78% renewal We were retaining for occupancy, not revenue. Keeping cheap residents, losing expensive ones. Cost: $84K/year ――――――――――――――――――――――――――――― MIX GAP: • 1BR units: 71% renewal • 3BR units: 47% renewal 53% of our highest-NOI units churned. Meanwhile, our lowest-margin units had the best retention. Backwards. Cost: $370K annually at risk ――――――――――――――――――――――――――――― STABILITY GAP: • 12-month renewals: 41% • 6-month + MTM: 23% Nearly a quarter of our "renewals" were short-term. Not stable retention — just delayed churn. They'd hit us again in 90-180 days. Cost: $113K/year ――――――――――――――――――――――――――――― Total: $180K-$220K leaking on one property. The headline 64% looked fine. But it was hiding three separate crises. We fixed the pricing strategy: • Top-quartile renewals: market or in-place +3%, whichever is LOWER • Bottom-quartile renewals: in-place +4-5% • High-tier units (3BR): 2-3% increases only • No more MTM renewals unless documented move-out date Six months later: • Top quartile retention: up 9 points • 3BR retention: up 12 points • True 12-month stable retention: 58% (up from 41%) Revenue per occupied unit: up $41/month across the portfolio. ――――――――――――――――――――――――――――― The lesson: Don't just track the headline renewal rate. Segment it. Quality. Mix. Stability. That's where the gaps hide. ――――――――――――――――――――――――――――― For anyone who wants the full breakdown: I wrote up the complete forensic analysis with the math, benchmarks, and a 1-page worksheet you can use to segment your own renewal data.

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