Holding on to great tenants is a priority for rental property owners. According to Utopia Management, employing even basic tenant retention strategies can reduce your vacancy rates by 20% or more. It is less expensive to retain reliable tenants than to market a vacancy, spend money preparing the property for showings, and one month or more lost rent. Here are some tenant retention ideas to keep in mind:
One simple way to keep good tenants around is to maintain clear and respectful communication from the very beginning. If there are any concerns or issues, reply as swiftly as possible so show them that you care about keeping the property satisfactory for their needs. Answering their calls and emails, or returning the call within an hour should be your goal.
Honesty is a big factor. Even if you are unable to fix all of their issues right away, have an honest conversation about what the timeline is. This is key in building the tenants’ trust with you.
Keep Up With Maintenance
A fairly obvious strategy to pleasing tenants is to keep up with all of the maintenance issues. Firstly, make sure the property is up to code and all amenities advertised are available and in working condition. If you slack off on maintenance issues, it can have a bad impression on you as an owner.
You should also make it very simple and accessible for tenants to notify you of issues or put in orders for maintenance requests. If you are slow to respond and drag out any maintenance issues for weeks or even months at a time, this can definitely have a negative impact on the tenant’s decision to rent from you long term.
Allow Flexibility With Good Tenants
Let’s say you have some decent tenants that you would like to stay in your property for a while. One thing you can do to impress them is to offer some personalized flexibility when it comes to their property. Listen to any suggestions they have and see if you’re able to help them come to fruition. For example, perhaps there is potential for installing a washer and dryer hookup in the unit. If you help them achieve this added convenience of doing laundry at the property, then it would greatly benefit the tenants and simultaneously build trust in the relationship between you and your tenant.
Another way to show flexibility to good tenants can be allowing them to sublet a room out, even if the lease does not indicate this is an option. Once you have established trust with a tenant, this could be a simple way to show them that you are willing to keep them happy even when roommate circumstances may change.
You can also be lenient with the pet policy. Allow a larger dog even if the advertisement says ‘small dogs’. Scheduling an in person meeting with the pet could be a way for you to make sure the animal is not problematic, connect with your tenants and show them that you care about accepting every member of their family.
Towards the end of the lease is an excellent time to show your students that you care about keeping them in your property. One way to influence their decision to resign or not can be to offer them an incentive. Perhaps you give them a gift card to a local store or restaurant. This is a small expense that can mean a lot to your tenants and possibly sway their decision to stay.
You can also allow good tenants to choose a pre-approved property upgrade at the start of the new lease. Offer two to three options and let them decide what is most important to them. Perhaps an automatic garage door opener, or new bathroom fixtures, or indoor/outdoor carpeting on a patio.
This may feel like an unnecessary expense to you, but professional property managers point out that many upgrades occur in between rentals. Why not invest in an upgrade now instead of later?
Keep Rent Reasonable
While you certainly want to optimize your profits as a property owner, you need to find a happy medium when it comes to rent if you want to maintain good tenants. If you abruptly raise rent, there is a good chance that they won’t want to stay at your property. You may think that you’ll lose profits by keeping the rent lower, but you actually save money by avoiding all the fees that incur through the process of finding another tenant. If you don’t increase the rent one year, be sure to highlight the reason and thank them for their continued reliability. Increase rents a small amount every other year instead of a large amount at one time.
Reducing the time in between tenants translates directly to higher profits. These seemingly small tips will increase the net rental income over a lifetime. While investing in real estate is one of the most common ways to slowly build wealth, it is a business and needs to be managed wisely.