Real estate investors all know that resident retention is essential. Property vacancies are costly not only for the lack of rental income but also for the costs associated with filling that vacancy. Reducing turnover is often a matter you can control and adjust as you go. Sometimes, however, investors hurt their chances from the start.
Here are our top strategies that decrease turnover in single-family rentals.
6 Strategies That Actually Impact Resident Retention
#1. Choose your investment market wisely
You help or hurt your retention rates simply by where you invest. Studies show the lowest turnover is in the Southeast, where 63% of landlords report a turnover rate under 10%. Why this is is debatable, but it demonstrates the power of location. Areas with higher job growth may experience higher turnover as their residents are more likely to move on to homeownership.
However, a market with a growing population (often increased by job growth) will have a better pool of residents and higher rental demand. So if there is turnover, the vacancy should be quickly filled.
Regardless, the point stands: where you choose to invest matters!
#2. Target demographics with higher retention rates
Surveys show that older households are more likely to stay where they are versus younger families that are more transient. High job growth with a low median age correlates to higher rental turnover. It may be as simple as a cultural age gap: younger generations are more accustomed to moving around, while older generations like to put down roots.
While you can’t exclude specific demographics from renting your properties (that’s illegal), you can provide the type of property that attracts long-term residents. Single-family rentals have a leg up over multifamily units. Those with room for a growing family are even better.
#3. Provide personable property management services
We’ve said it before, and we’ll say it again – excellent property management services are your first line of defense. Property management isn’t all about numbers and efficiency, though. They’re about a relationship. Your residents should feel comfortable with their managers and trust them to do the right thing, not just for your bottom line but for their sake.
This means soliciting feedback, creating a welcoming environment, and communicating clearly and warmly.
#4. Prioritize resident safety
No one wants to stay in a place where they feel unsafe. As a property owner, you must ensure your property is safe. Location plays a part, but a sense of safety is also something you control. Consider the strength of exterior doors, locks and deadbolts, sturdy windows, outdoor lighting, and security systems.
Of course, safety isn’t limited to criminal threats. It also means swiftly repairing bad steps, sidewalk and driveway cracks, and other tripping risks. Hire reputable contractors, plumbers, and electricians who won’t leave exposed hazards unaddressed.
#5. Offer desirable amenities
Before you purchase a property, consider its amenities. These can be nearby recreational spaces, access to public transportation, and key places – grocery stores, shopping districts, and schools. It may also include things you can’t see! For example, 94% of single-family residents want high-speed internet. Is it available for your property?
On-site laundry, ample parking spaces, quality utilities, and service options…these all play a role in resident retention. Be sure that your property can provide what people want and need.
#6. Respond diligently and swiftly
We can’t stress this enough. While no residents want to feel badgered or imposed upon, they don’t want absentee management, either. There’s nothing worse than requesting to address a problem and waiting weeks for it to get fixed. You and your managers may feel the effects of “out of sight, out of mind,” which makes the problem seem smaller.
Your residents, though, see it every day. And every day, that’s a reminder that they’re not being adequately taken care of. For some, that’s enough to want to run.
Sometimes there are reasons something can’t be immediately addressed. If this is the case, your management team must communicate with your residents. They should be looped in on the process, knowing what to expect and when to expect it.
Though outside factors certainly impact a rental household’s decision to leave, there are so many things you can do – through your management team and the property itself – to make moving out their last resort. Investors should do everything possible to make a great resident reluctant to leave!
With us, you get a turnkey partner who cares about the details—from location to long-term resident retention!