Property Management Basics: Tips to Improve Tenant Retention

We all know that vacancies are expensive. Every month a property remains vacant takes money out of your pocket. You still owe property taxes, insurance premiums, and, in most cases, a mortgage payment, while there is no rent to cover these expenses. Also, every time a tenant moves out, they often have to pay out-of-pocket to repaint the house and clean or replace the carpets, in addition to other miscellaneous repairs. The best way to avoid these costly gaps is to improve tenant retention.

Here are some tips that may be helpful to keep your tenants renting your properties for the long term:

Select good tenants to start.

This may seem obvious, but the typical temptation is that after your property has been vacant for a month, you are willing to let almost anyone rent it, even if they have some issues with your credit report, etc. The important thing to remember is that it is much better to wait another month to rent to a highly qualified tenant who, at a minimum, will honor their lease with you, than to have the less qualified tenant break the lease and move out. after four months, or worse, they must be evicted by you. By having highly qualified tenants rent your properties, you significantly increase the odds that they will honor the lease and hopefully renew it for another term.

Provide your new tenants with a helpful welcome pack.

Your goal as a landlord is to establish a positive relationship with your tenants from the very beginning. This starts with making your move as smooth and pleasant as possible. One of the things he needs to do is provide them with a welcome pack. You should have information about the property and how you can be contacted for maintenance requests and other matters. You can include relevant information such as phone numbers for local utility companies, schools, public services, etc. You should also include entertainment and dining information about your new community. A nice touch would be to add some coupons for some local restaurants.

Keep your rent slightly below market.

When it comes time to renew a lease, you may want to consider not raising the rent to full market value. If the rent needs to go up by $30, consider raising it by just $10. If you raise your rent too much at once, your tenants may move out in search of cheaper housing. But, if your rents are slightly below market value, anxious tenants will be less likely to move when they see that they are actually getting a good deal compared to what other properties are renting for. Of course, if your market is slow and rents haven’t really gone up that much, then don’t raise rents that year.

Responds promptly to tenant maintenance requests.

Make sure you have a strong system for responding to tenant maintenance calls. Even if they request a frivolous repair that you are not going to do, it is very important that you call them back immediately and politely explain your policy on that item. For emergency repairs, time is of the essence, so make sure if you are handling property management yourself that you get your messages regularly and that you already have repair people prepared to deal with these types of situations. If you’re not that good at following up and staying on top of tenant requests, I’d suggest hiring a professional property management company to take care of this for you.

Maintain positive contact with your tenants throughout the year.

Again, your goal should be to foster a positive landlord-tenant relationship. This can include things like sending “Season’s Greetings” cards over the holidays to your tenants. You should also do a semi-annual property inspection with your tenant and take this opportunity to get up to speed with your tenant and their life. If you show a genuine interest in your tenants and are accessible in this way, they are more likely to come to you with potential problems they may have with their rental, rather than just moving out because they don’t have personal contact with you.

In general, there is no magic bullet for getting and producing long-term tenants. However, you can apply some of these common sense measures to increase the chances that your tenants will stay in your properties for a long time.