Retaining tenants is one of the best ways to increase your return on investment (ROI). It’s often overlooked by owners, however. Don’t miss out on this opportunity to earn more money with your investment property. It’s worth your time and resources to implement a tenant retention plan. You need to actively work towards encouraging your residents to renew their lease agreements at the end of the tenancy.
Avoiding vacancy costs is important. Avoiding turnover costs is even more important. It can cost you thousands of dollars just to get your property ready for a new tenant after your existing tenant moves out. It’s far more cost-effective to keep your tenant, even if you have to offer a renewal rate that’s slightly below market rents.
Keep your good tenants.
Here are five tips we have to ensure your retention rates improve. You’ll find that when you reduce your turnover, you’re earning more and spending less on your investment.
1. Communicate Expectations Before Move-In
Tenant relationships have a huge impact on what you’re able to earn. Developing and maintaining a good relationship with your tenants is an excellent way to keep them in place. You need to start nurturing that relationship before they even move in.
One thing that will help tenants have a successful and pleasant rental experience is good communication. A landlord with a strong tenant retention plan is responsive, available, and accessible. Your residents will need to know how to reach you if there’s a problem or they have a question.
Sharing your expectations with residents is an important part of communicating with them.
Your tenants can’t succeed if they don’t know what they’re responsible for. When you’re going over the lease agreement, discuss the most important lease clauses in detail. Prepare to reinforce and answer questions about:
Rent collection policies, including grace periods and late fees.
Maintenance reporting procedures.
Move-in and move-out processes, including condition reports.
A lot of landlords and tenants today communicate electronically. You may not be together in person to discuss the particulars of the lease agreement, but by explaining your expectations and ensuring your new tenants understand what they’re responsible for, you can ensure the rental period will be better for everyone. You’ll also be letting them know that you are open to questions and willing to support them when necessary. You want your tenants to feel comfortable reaching out.
While we’re on the topic of communicating with your tenants, think about how much you’re prioritizing your ability and your willingness to listen. Active listening leads to better responses. Your tenants feel heard. Good landlords who are communicative and available have an easier time retaining tenants than landlords who are non-responsive or difficult. Make sure you’re communicating with your tenants and being helpful.
2. Provide a Positive Rental Experience
What creates a positive rental experience for tenants? Often, that depends on the tenant. However, there are a few universally appreciated actions that can go a long way in helping tenants feel respected and valued.
If you want to provide a positive rental experience and nudge your residents into renewing their lease agreement, consider taking these actions:
Provide resources and keep in touch without being overbearing. Tenants have a right to quiet enjoyment of the property. They’re looking for privacy. You don’t need to be calling or sending messages every week. But, if there’s something happening in town that you think might interest them or you know road construction is planned for the neighborhood, send a quick update. They’ll appreciate that you thought of them.
Simple gratitude can go a long way. Say thank you when rent is paid on time or your tenant is accommodating to vendors, pest control people, or neighbors who need help. You don’t want your tenants only to hear from you when something’s wrong. Keep your interactions positive and professional.
Reward good tenants and provide small gifts when appropriate. Send a birthday card. Leave a welcome gift when they move in. If rent is paid on time six months in a row, consider sending them a gift card for a local coffee shop. It’s the opposite of a late fee; they’re getting positive reinforcement and they’ll remember that you appreciate them.
Tenants feel good about living in their home when they know that they’re more than a rent check. Help your residents to feel special, and you’ll find they’re more willing to stay in place.
3. Always Be Responsive With Maintenance Requests
Maintenance has to be a priority.
Well-maintained properties will retain good tenants, so it’s important to respond to routine repair requests quickly. If you’re slow to respond, your tenants are likely to leave at the end of the lease term. Make maintenance a priority, and respond to repair needs with a sense of urgency and respect for your tenant’s requests.
Communicate your maintenance procedures so your tenants know what to do when something is wrong, and then be responsive to their needs.
It’s not always possible for you to fix something right away. Maybe your vendors are delayed or you’re waiting for a part. Tenants are likely to be understanding, as long as you communicate the status of the work. If you can’t fix something right away, let your tenants know where things stand and what you plan to do about the problem moving forward.
Making routine and regular improvements will also help you keep tenants. Good renters want to live in a home that’s attractive and comfortable. Replace out-of-date appliances, make sure the walls have fresh paint, and install floors that are easy to maintain and clean.
Consider upgrades from time to time as well, especially at renewal time. Perhaps they want fresh paint on the walls or a new appliance. Be willing to work with them. It’s important not only to maintain your property, but also to improve it consistently.
If you’re willing to work with them and continually update your property to make it attractive and competitive, you’re going to have an easier time keeping your tenants.
Both repairs and regular improvements will reduce tenant turnover and even increase the amount you are able to charge in rent. When your residents get a sense that you’re willing to improve the property and make it better for them, they’ll want to stay.
4. Make Sure Your Rental Increase is Reasonable
Rental increases are normal and expected. Most tenants will not be surprised when their lease renewal offer comes with a higher rent.
They also understand that rents are higher now in the market than they were when they first rented their home from you. It’s okay to increase the rent even while you’re trying to retain your residents.
That doesn’t mean you should chase away a great tenant with an unreasonable rental increase. Study the local rental market and homes that are similar to your rental. You’ll want to know what is being charged out there. Chances are, you’ll be able to raise your own rent while still staying at or just below the market prices. This will encourage tenants to stay because even though their rent is going up, they don’t have to worry about the expense and hassle of moving into a new place that probably will cost just as much.
5. Consider Norfolk Property Management
There are lots of excellent reasons to work with a property manager in Norfolk and the surrounding areas. One of those reasons is our excellent track record with tenants and retention.
Your property manager will do a better job of retaining tenants than you can because property managers understand tenants and what they need. We work with hundreds of residents every year. We also have excellent relationships with vendors and contractors, which means we can facilitate repairs faster. We can also negotiate discounted rates, which saves you money.
Tenants feel comfortable with professionally managed homes because they know that their rights will be respected and their responsibilities will be clear. They won’t have to worry about sudden policy changes, a lack of communication, or unreliable maintenance services.
Working with a property management partner comes with a number of benefits, and one of those benefits is that you don’t have to think about your tenants at all. Your management team will be responsible for identifying the tenants, screening the tenants, and ensuring they’re having a positive rental experience. Your management team will enforce the lease, collect the rent, and communicate with your tenants when necessary. You won’t have to worry about negotiating a renewal.
Property managers are very good at attracting, placing, and retaining tenants in your investment home. Our experience delivers the processes that are needed to facilitate an easy and efficient leasing process. We’re responsive during the tenancy and we prioritize maintenance and tenant relationships.
We’ll help you retain tenants and earn more on your property. If you’d like to talk about this further, please don’t hesitate to contact us at Doud Realty Services, Inc. We provide expert property management in Norfolk, Portsmouth, Hampton Roads, as well as surrounding areas such as Virginia Beach, Suffolk, Chesapeake, and Newport News.