Attracting tenants to your rental property is one thing. Keeping them is another matter entirely. Here, we provide guidance on how to retain tenants and the financial consequences of doing so.
Financial impact of tenant turnover
Tenant turnover can have a significant impact on your financial well-being. Costs include lost rent during the vacancy, marketing expenses to find new tenants, and maintenance and cleaning expenses.
For example, if your property has a monthly rent of $1,500 and it is vacant for two months, you will lose $3,000 in rent. Add in $500 in marketing expenses and $1,000 in maintenance and cleaning expenses, and the total turnover could easily exceed $4,500.
Do you now understand the importance of focusing on tenant retention?
10 Tips for Retaining Tenants in Your Rental Property
Here are 10 tips for retaining tenants and taking advantage of the financial benefits of doing so.
1. Strict screening
Start by thoroughly screening potential tenants. This process should include checking credit history, verifying income, and contacting previous landlords for references. Tenants with stable income, good credit, and a good rental history are more likely to pay rent on time and take care of the property.
Use a standardized screening process to ensure fairness and consistency. Clearly communicate your requirements and standards to applicants so they know what to expect.
By choosing reliable tenants from the start, you can reduce the likelihood of frequent turnover and the associated costs.
2. Timely maintenance
Process maintenance requests promptly. When tenants report problems, respond quickly and schedule necessary repairs as soon as possible. Responsive landlords demonstrate concern for the property and tenants’ well-being and create a positive living environment.
Schedule preventive maintenance regularly to avoid bigger problems. This proactive approach keeps the property in good condition and shows your tenants that you are committed to maintaining a safe, comfortable home for them.
3. Competitive price
Set a competitive rent by researching local market prices. This ensures your property is priced fairly and attracts and retains tenants. Overpriced rentals may result in longer vacancies, while underpriced units may not adequately cover your costs.
Reevaluate your pricing regularly to stay in line with the market. Providing value for money, coupled with good service, will help keep tenants happy and reduce the likelihood of moving out in search of a better deal.
4. Lease renewal incentives
Offer renewal incentives to encourage tenants to stay longer. Small incentives, such as rent discounts, upgraded appliances, or a freshly painted unit, can have a big impact on their decision to renew.
When having lease renewal discussions, clearly communicate these incentives. Showing appreciation for your tenants’ loyalty not only makes them feel valued, it also reinforces their commitment to living in your property.
5. Good communication
Maintain open and respectful communication with tenants. Check regularly to see how they are doing and if you have any concerns. Clear communication builds trust and makes it easier for tenants to report issues.
Use a variety of channels to stay in touch, such as email, phone calls, and in-person meetings. Address issues promptly and inform tenants of any property updates or upcoming maintenance work. Good communication fosters positive relationships and increases tenant satisfaction.
6. Regular attribute upgrades
Invest in regular property upgrades to keep your rental attractive and comfortable. Simple improvements like new appliances, fresh paint, or updated fixtures can significantly improve a tenant’s living experience.
Plan upgrades regularly and notify your tenants of upcoming enhancements. This increases the property’s appeal and demonstrates your commitment to providing a high-quality living environment, encouraging tenants to stay longer.
7. Flexible lease terms
Consider offering flexible lease terms to meet tenants’ changing needs. Options like month-to-month leasing or shortened lease terms can make your property more attractive to tenants with uncertain plans.
Clearly outline terms and any associated flexibility costs. By offering adaptable leasing options, you can cater to a wider range of tenants and increase the likelihood of retaining them.
8. Community building
Foster a sense of community among tenants by organizing events or creating shared spaces where they can interact. Community-building events, such as festive parties or tenant meet-and-greets, can enhance the overall living experience.
Encourage tenants to get to know each other and create a friendly, supportive environment. A strong sense of community increases tenant satisfaction and loyalty and reduces churn.
9. Proactively solve problems
Proactively resolve issues before they escalate. Contact your tenants regularly so any potential issues can be addressed early. This proactive approach can prevent small problems from turning into big ones.
Schedule routine inspections and maintenance checks to identify and resolve problems promptly. By resolving issues upfront, you can encourage tenants to stay longer by demonstrating your commitment to maintaining a high-quality living environment.
10. Fair Policy
Implement and maintain fair policies regarding rent increases and property rules. Transparent, reasonable policies make tenants feel respected and valued, reducing the likelihood of disputes.
Communicate policy changes clearly and in advance. Fair treatment and consistent enforcement of rules can help build trust and encourage tenants to stay in your property for the long term.
final thoughts
There’s no guaranteed way to keep tenants in your rental property, but there are some definite steps you can take to help your cause. The 10 here are a good starting point. By implementing these strategies, you can create a more attractive and stable living environment that encourages tenants to stay longer. Remember, retaining guests reduces turnover costs and promotes positive landlord-tenant relationships.
Save time and money with this refreshing guide to managing your own property.
exist self-managed landlordAmelia McGee and Grace Gudenkauf share tips for efficient property management, tenant screening and onboarding, and scaling your business, all to help you escape the 9-to-5 drudgery and create lasting wealth through real estate.
Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.
