Do you know how much revenue you’ve lost over the years due to tenant turnover? It’s a common and very costly problem for property managers. Rental vacancies can impede cash flow, increase workload and ultimately impact your bottom line. And it’s an especially important issue to address before the housing boom begins to wane. To help you get a plan in place now and hedge your bets for a more secure future, here are eight ways to improve tenant retention.
Be strategic about your properties.
You’ll have a much better chance of both attracting and keeping quality tenants if the properties you’re managing are of equally good quality. Be strategic about your portfolio. For instance, look specifically for properties located in nice areas where employment is high and there is access to good transit. The more amenities in and around the property, the higher the demand will be to rent and stay in your units.
Make screening a priority.
The best defense is always a good offense. Property managers can significantly lower their risk of tenant turnover by being proactive about screening upfront. So, be sure to check references and verify past rental behavior. If someone has moved four times in the last year, it’s a red flag.
Respond to questions and complaints promptly.
It is human nature to want to feel heard, and the same applies to those renting your properties. If questions go unanswered - or worse – problems go unresolved, your residents will become frustrated and when they do, chances are they’ll start to look elsewhere. Make sure you’re responding in an appropriate amount of time – preferably within 24 hours.
Invest in ongoing maintenance.
Property managers that stay on top of their units and buildings have much more success keeping tenants for the long term. As such, routine maintenance and upkeep are critical to your company’s longevity. By investing in your properties, you’ll also be investing in your tenant retention.
The longer you can lock up a good tenant, the better. So sweeten the pot a little by providing them value in return for their commitment. Show them that you care about them and will keep up the property and include terms that are attractive. Just be sure to do your diligence in screening tenants first. You don’t want to get stuck in a 2-year agreement with someone who isn’t ideal.
Modernize your processes.
Property management software does more than just make the lives of property managers easier. It can also make serving your tenants better as well. For instance, the option to pay rent online and other digital features can be incredibly attractive to modern renters – especially millennials.
Keep communication open and honest.
Make sure your residents have a fast and easy way of getting ahold of you when they need to. Communicate often to keep tenants in the loop and be honest about things like problems and delays. Occasional disappointment is much better than regular frustration, which can cause good tenants to leave.
Be careful about increases.
Raising the rent is something many property managers have to do from time to time, but if you’re not careful, you could price yourself right out of the market. If you must increase, be sure what you’re proposing is in line with other properties in the area and that you can justify the amount. And always give ample notice in advance.
Being successful in property management requires a lot of work, particularly in the way of tenant retention. By knowing the challenges and what to plan for, you can proactively reduce risk and keep turnover at a minimum.