Jul 22, 2019
According to the National Center for Housing Management, 54% of apartments turn over every year. Each tenant turnover will cost you time, effort and money. Such as cleaning costs, repair costs, utilities, property management fees, mortgage payments etc. And if you will count this costs per month, you will be surprised by the number that it will easily reach over $1000.
Reducing or eliminating your turnover expenses by keeping good tenants longer can help you to be a more profitable landlord. Here are some of the tips that I would like to share with you.
Considering the monetary and other benefits to keeping a tenant in your unit for as long as possible, it’s well worth it to find ways to increase the appeal for your tenant stay put. In many cases, the incentives you offer your tenant potentially will cost much less than the expense to carry a vacant unit. Even better, not all motivating factors will cost you money.
1. STAY ON TOP OF MAINTENANCE.
Keep your tenant happy by being proactive with property maintenance and routinely performing property inspections.
Few things are more frustrating for a tenant than having unaddressed maintenance requests. Being proactive with maintenance helps keep your tenant happy (no one wants to live with a clogged sink), and shows them that you want to give them a nice place to live. This can be a big deciding factor when your tenant is considering a renewal.
Additionally, keeping up with maintenance and addressing issues quickly will help you spend less time on repairs when you do have to turn over the unit. Regularly inspecting the unit’s condition will help you stay on top of maintenance items that need to be addressed (that the tenant may not have noticed) and can help keep smaller maintenance tasks from turning into larger issues.
2. BE A GOOD LANDLORD
You shouldn’t underestimate the importance of the human factor when it comes to tenants. Your renters will be more likely to want to stay if you’re a good landlord.
Be timely with your responses and make it easy for the tenant to contact you. Maintain open communication to reduce misunderstandings and create a better overall tenant-landlord relationship. Being courteous and respectful goes a long way to make a tenant feel comfortable in the unit.
For example, if you have to make repairs on the unit, consider having workers come while your tenants are at work so that you don’t disturb their peace and quiet. After all, the more a place feels like home, the longer a good tenant is likely to stay. A cooperative attitude also sets the expectation of how you want to be treated in return, which makes it more likely that your tenants will respect you and your property.
If you make certain promises, be sure to keep your end of the bargain. Did you promise a new appliance when they moved in? It’s important to keep your word. Breaking a tenant’s trust may have them looking for another place.
3. KNOW WHAT TENANTS WANT MOST
It’s important to know what factors tenants look for in a rental property so you can cater to their needs.Offering features that tenants care about most will help you attract better long-term tenants and serve as an incentive for them to renew their lease. Strategic upgrades like stainless steel appliances or hardwood flooring features that can make a house feel like home. These upgrades can potentially be good investments if you want to encourage tenants to stay longer.
You may also want to consider renovations in the kitchen and bathroom, which are especially appealing to tenants. Even simple upgrades like a new or updated kitchen cabinet hardware can make a big impact. While there is an upfront cost to new appliances and renovations, it may be worthwhile when you consider the high expense of tenant turnover.
4. BE PROACTIVE WITH RENEWALS
Reach out to your tenant 90 days before the lease is up to ask them if they want to renew. Even if you don’t get a response right away, it might get them thinking about their plans early so they can give you more notice. That way, you can get a jump on advertising before the tenant moves out and perhaps have someone lined up to take their place without losing even a month of rent.
Offer a rent increase that is less than your usual jump (or even no increase) for the upcoming year if they renew for another year. If they seem hesitant about renewing, then ask them what it would take to get them to stay. This is another reason to have a good landlord-tenant relationship. The better your communication with a tenant, the more likely they are to open up and tell you what incentives are most meaningful to them.
They may request some home maintenance upgrades or a break on rent. See if you can negotiate a deal that makes sense for both of you. You may find that fulfilling a tenant’s request may turn out to be less of an expense for you than turning over the unit and a taking a risk on a new tenant.
5. ENCOURAGE A LONGER LEASE
Consider asking the tenant to sign a longer term lease at a reduced rate. If they renew every six months, extend the lease to a year. If they renew yearly, consider extending the lease to two years at a reduced rate. While this method could mean you lose out on the profit from rent increases, it could be worth it to keep a reliable, rent-paying tenant longer. Make sure you properly crunch your numbers so you know what option is best for you.
So, retaining reliable, rent-paying tenants is good for your rental business. By encouraging good tenants to renew their leases, you'll avoid the costs associated with vacancy and have the peace of mind that comes with keeping tenants who you already know will pay their rent on time and will respect your property.
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