It’s one thing to attract a tenant to your rental property. It’s another thing entirely to retain them. Here, we provide guidance on how to retain tenants and the financial results of doing so.
Financial Impact of Tenant Turnover
Tenant turnover can significantly impact your finances. Costs include lost rent during vacancies, marketing expenses to find new tenants, and expenses for repairs and cleaning.
For example, if your property rents for $1,500 per month and remains vacant for two months, you lose $3,000 in rent. Add $500 for marketing and $1,000 for repairs and cleaning, and the total cost of turnover can easily exceed $4,500.
Now do you understand the importance of focusing on tenant retention?
10 Tips for Retaining Tenants at Your Rental Property
Here are 10 tips for retaining tenants and taking advantage of the financial benefits of doing so.
1. Thorough 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 positive 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 criteria to applicants so they understand what’s expected.
By selecting reliable tenants from the start, you reduce the likelihood of frequent turnover and associated costs.
2. Prompt maintenance
Address maintenance requests promptly. When tenants report issues, respond quickly and schedule necessary repairs as soon as possible. A responsive landlord demonstrates care for the property and the well-being of tenants, fostering a positive living environment.
Regularly schedule preventive maintenance to avoid larger problems. This proactive approach keeps the property in good condition and shows tenants you are committed to maintaining a safe, comfortable home for them.
3. Competitive pricing
Set your rental rates competitively by researching local market rates. This ensures your property is priced fairly, attracting and retaining tenants. Overpriced rentals can lead to longer vacancies, while underpriced units might not cover your costs adequately.
Reevaluate your pricing periodically to stay aligned with the market. Offering value for money, combined with good service, helps keep tenants satisfied and less likely to move out in search of better deals.
4. Lease renewal incentives
Offer incentives for lease renewals to encourage tenants to stay longer. Small rewards, such as a rent discount, upgraded appliances, or a freshly painted unit, can make a significant difference in their decision to renew.
Communicate these incentives clearly when approaching lease renewal discussions. Showing appreciation for your tenants’ loyalty not only makes them feel valued, but also strengthens their commitment to staying at your property.
5. Good communication
Maintain open, respectful communication with your tenants. Regularly check in to see how they are doing and if they have any concerns. Clear communication builds trust and makes tenants feel more comfortable reporting issues.
Use multiple channels to keep in touch, such as email, phone calls, and in-person meetings. Address concerns promptly, and inform tenants about any property updates or upcoming maintenance work. Good communication fosters a positive relationship and enhances tenant satisfaction.
6. Regular property upgrades
Invest in regular property upgrades to keep your rental attractive and comfortable. Simple improvements, such as new appliances, fresh paint, or updated fixtures, can significantly enhance the living experience for your tenants.
Plan for upgrades periodically, and inform your tenants about upcoming enhancements. This improves the property’s appeal and shows your commitment to providing a high-quality living environment, encouraging tenants to stay longer.
7. Flexible lease terms
Consider offering flexible lease terms to accommodate tenants’ changing needs. Options such as month-to-month leases or shorter lease periods can make your property more appealing to tenants with uncertain plans.
Clearly outline the terms and any associated costs for flexibility. By offering adaptable lease options, you cater to a broader range of tenants and increase the likelihood of retaining them.
8. Community building
Foster a sense of community among your tenants by organizing events or creating shared spaces where they can interact. Community-building activities, such as holiday 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 can increase tenant satisfaction and loyalty, reducing turnover rates.
9. Proactive problem-solving
Be proactive in solving problems before they escalate. Regularly check in with your tenants to address any potential issues early. This proactive approach prevents minor concerns from becoming major problems.
Schedule routine inspections and maintenance checks to identify and fix issues promptly. By staying ahead of problems, you demonstrate your commitment to maintaining a high-quality living environment, which encourages tenants to stay longer.
10. Fair policies
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 well in advance. Fair treatment and consistent enforcement of rules help build trust and encourage tenants to stay at your property long term.
Final Thoughts
There’s no guaranteed way to retain tenants at your rental property, but there are definite steps you can take to help your cause. And the 10 here are a good place to start. By implementing these strategies, you create a more appealing and stable living environment that encourages tenants to stay longer. Remember, retaining tenants reduces turnover costs and fosters a positive landlord-tenant relationship.
Save time and money with this refreshing guide to managing your own properties.
In The Self-Managing Landlord, Amelia McGee and Grace Gudenkauf share the secrets of efficient property management, tenant screening and onboarding, and scaling your business—all to help you break free from the 9-to-5 grind and create lasting wealth through real estate.
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
