As a landlord, steady, predictable cash flow is always going to be your number one priority. And while there are several factors that influence cash flow, retaining tenants is one of the most important.
How to Improve Retention
As you know, finding a new tenant can be expensive and time-consuming. It can sometimes take several weeks, which is obviously time that you don’t get back (and therefore aren’t able to collect rent).
With that being said, once you find a good tenant, the last thing you want to do is let them go. High tenant turnover can disrupt this flow and lead to increased costs and decreased profits.
Improving your tenant retention rate not only stabilizes your income but also reduces the expense and effort involved in finding new renters. So here are some effective strategies to help you keep your tenants for longer periods of time:
1. Maintain Open Communication
Good communication is the cornerstone of any strong relationship, including that between a landlord and tenant. Make yourself available and approachable. When tenants have questions or concerns, respond promptly and provide as much information as you possibly can. It will also benefit you to regularly check in with them to ensure they’re satisfied with their living conditions and feel valued. A proactive approach like this can make a significant difference in how tenants perceive your management style and their overall satisfaction.
2. Use a Property Management Company
Sometimes, the best way to ensure tenant retention is to hire professionals to do it for you. A property management company can be more attentive to your tenants’ needs than you might be able to be, especially if you have other commitments or own multiple properties.
Property management companies specialize in all aspects of property management, from marketing vacancies and screening tenants to handling day-to-day operations and maintenance requests. They understand what it takes to keep tenants happy and are often more equipped to respond to issues quickly and efficiently.
For best results, find a property management company that specializes in properties like yours. For example, if you have a luxury property, you’ll want to hire a luxury property management company, as they’re going to be better equipped to understand the level of care you need.
3. Respond Quickly to Maintenance Requests
Quick and efficient handling of maintenance issues is another key factor in tenant satisfaction. No one wants to live in a property where their concerns are ignored or delayed. By addressing repairs swiftly, you not only keep your property in good condition but also show your tenants that you care about their comfort and safety.
As a general rule of thumb, you should aim to get back to a tenant within 60-90 minutes of their request being submitted. This doesn’t mean you’re going to solve the issue right away – but you should at least acknowledge that it’s been received and provide some feedback on what you’re doing to solve it.
4. Offer Lease Renewal Incentives
Consider offering incentives to encourage tenants to renew their leases. These incentives could include a discount on the first month’s rent upon renewal, a free or discounted property upgrade (like new appliances or a fresh coat of paint), or even flexible lease terms.
No matter how small, gestures like these will make tenants feel appreciated and more inclined to remain on your property. Additionally, it often costs less to retain a tenant with these incentives than to find a new one. (And the next time you do need to find a tenant, your property will be in even better condition.)
5. Create a Sense of Community
People are more likely to stay where they feel they belong. If you have a multi-family property – like a quadplex or an apartment building, do your best to foster a sense of community among your tenants by organizing regular events like barbecues or holiday parties. This can encourage interactions and friendships among residents, making them feel more connected to the place they live. When tenants have friends in the building or complex, they’re less likely to move.
Another idea is to create a community newsletter or a digital bulletin board to share news, updates, and helpful tips with your tenants. Again, little details like this make people feel like they’re a part of something.
Give Your Retention Rate a Boost
If you can take your average retention rate across all properties from, say, 12 months to 15 months, that’s going to add up over a period of several years to equal thousands of dollars in additional profit.
You don’t need to implement every single tip that we’ve discussed above. However, if you can take one or two suggestions and integrate them into your current strategy, they’ll most likely serve you well. Good luck!
