How to Improve Your Tenant Retention Rate
One of the worst things about renting out property is finding tenants. A lot of time and effort goes into finding interesting parties, meeting with them, and finding out whether they are trustworthy. It would, therefore, be much easier if you could avoid this as much as possible. One good way is to find and then keep reliable long-term tenants. If you can find a way to improve your tenant retention rate, you won't have to go looking for new tenants as often; this saves you money, time, and effort. So, here are a few tips to help get you started.
Why should you improve your
tenant retention rate?
You
may believe that as long as somebody is leasing your property, it doesn't
really matter who they are or how long they've been there. But you would be
wrong. Not caring about tenant retention is one of the top mistakes landlords make. By not working on keeping your tenants long-term, you'll miss out on a lot of benefits,
including:
● less money spent on turnover costs: finding new tenants requires listing and marketing the property, background checks, and various leasing fees; if you keep the same tenants for more extended periods, you don't have to spend all that money
● no vacancy time: unless you are really lucky, there will be some time between when your previous tenants leave and new tenants move; this vacancy time costs you money, and the easiest way to avoid it is to keep your current tenants
● less time spent looking for new tenants: finding new tenants can take a lot of time, time that is better spent elsewhere; so avoid looking for new tenants whenever possible
● the security of knowing your tenants: leasing out property is always a bit of risk; when you find good tenants who follow the rules and pay on time, it's in your best interest to keep them
What are the best ways to improve your tenant
retention rate?
If you've (wisely) decided to try keeping your tenants for longer, there are many things you can do to entice them to stay. Here are some of the best tips and tricks for improving tenants retention rates:
Choose the right
tenants
A huge factor in whether you are able or willing to retain tenants is the tenants themselves. So, during the selection process, make sure to ask the right questions. You want trustworthy and stable tenants with the financial capabilities to rent your property. Find out about their renting history, screen their finances, and ask about their professional and personal plans for the future. Don't lease to people who will cause you trouble - it's not worth it.
Build
relationships with your tenants
Although a relationship between a landlord and a tenant is a professional one, being polite and friendly to your tenants is vital. They are far more likely to want to extend their contracts with you if they trust you and feel comfortable with you. Treat your tenants the way you would want to be treated in their situation. Be kind, honest, and respectful - they'll return the favor!
Maintain the property well
People will want to stay in a place that serves them well. Make sure that your properties are always well-maintained. You may even want to use some home staging techniques to create a cozy-looking space that your potential tenants will fall in love with. Of course, it is your tenants' responsibility to keep their own living spaces clean and tidy, but you need to handle major repairs and upgrades. And you should do it promptly as well; nobody wants to wait for days to get their pipes unclogged. So make sure to be responsive when tenants contact you about issues on the property. If you're not sure that you can handle maintenance on top of everything else you're doing, it might be time to hire a property manager. That way, you can take this burden off your shoulders.
Offer incentives
for long-term contracts and renewals
If you want tenants to stay long-term, you need to give them a reason. Being a nice landlord and having a great property will go a long way, but you're probably not the only one in the area offering this. So, a bit of extra incentive is what you need. You may, for example, offer better rental rates for long-term contracts than short-term ones. Or you may entice them with an additional service only provided to those renewing their contract. You can, for example, partner with other businesses in the area to offer your tenants discounts on handmade furniture, a temporary solution for unnecessary items in the form of quality storage units, a one-time professional deep-cleaning service of the home, or other perks.
Reasonable rent and rent increases will go a long
way
Your property is a source of income for you, but that doesn't mean you can get away with being greedy. If you charge too much, you simply won't be able to get or keep tenants, and all that potential income will go out of the window. So respect fair housing practices and offer reasonable rates. When you need to increase the rent, do so gradually so that your tenants have time to adjust. The math works out: set your prices so high no one can afford them, and you'll earn nothing; set competitive prices, and you'll get tons of tenants whose rents will add up to good profits for you.
Other things you can do to
improve your tenant retention rate
While these are the best strategies to improve your tenant retention rate, they aren't the only things you can do. Other good tips include having good communication with your tenants, asking them why they're leaving when they choose not to renew the contract, and keeping an eye on the market. This will give you valuable information about what your tenants like, what you're doing wrong, and what your competition is doing right. You can learn a lot from this! Finally, try to be flexible with good tenants. Everyone goes through a period when things aren't going right for them. If you show some understanding, you'll get to keep good tenants for longer, and it'll all pay off in the long run.
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