What makes a good tenant a happy tenant? This is a question everyone asks when real estate investing. After all, when you have great tenants who pay on time and take care of your investment property, you want to keep them. Plenty of property managers and owners find themselves befuddled with a good tenant goes elsewhere.
Tenant retention is crucial for anyone investing in real estate. Vacancies are one of the most costly times for real estate investors and turnover itself can be a hit to your wallet. So how do you ensure that the tenants you want to keep will renew their lease and continue to rent from you?
Keys to Improving Tenant Retention
Be Responsive & Proactive
Any tenant wants to know that they’re being properly cared for. They want their concerns to be addressed promptly and without being given grief or being made to feel like an imposition. Pay attention to how your property manager or maintenance staff interact with tenants. Don’t ignore complaints. Even if a problem can’t be addressed immediately, make sure someone lets the tenants know when it can be addressed. Follow through!
Maintenance alone isn’t enough. After all, all units and homes are held captive to the test of time. Are you making steps to ensure that your properties are kept modern and updated?
Build Up a Relationship
Your tenants should never be theoretical people who happen to send you money every month. While you or your property manager shouldn’t be friends with your tenants, reinforcing a positive professional relationship is important to tenant retention. Think about the small things — a welcome basket, thank you notes, or simply shooting the breeze. If you invest time and a little bit of money into personally connecting with your tenants, it will be reflected come lease renewal. Having approachable, thoughtful people managing your properties is absolutely necessary.
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Respect Your Tenants
We’ve all had to deal with bad tenants. Some of us are jaded by them to the point where we expect the worst. One of the worst things you or your manager can do to your tenants is to treat them as guilty until proven innocent. No one wants to be too trusting, but if a tenant has been consistently good, there’s no reason to expect bad of them. While there will be exceptions to rule and you may be blindsided, part of respecting your tenants is investing some level of trust in them. Why would you rent to someone you don’t feel good about in the first place?
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Develop Incentives
Besides simply adjusting how you or your managers relate to your tenants, consider how you can create systems to improve retention. Incentives are a big deal — and on the whole, people prefer monetary incentives. Do your tenants pay on time? Consider giving them points for it that add up to a lease renewal rebate. There are plenty of ways to incorporate incentives and rewards to encourage good tenants to stick around.
Have you had success with retaining good tenants? Share your tips in the comments.
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