We’ve been in this business for a while now. It’s safe to say we’ve seen just about everything the market can throw at real estate investors, from housing market crashes to global pandemic panic. Good times and tougher ones, too. 

We’ll let you in on a secret, though: your success in real estate investment rarely has to do with market conditions. It has everything to do with the things you can control. As a turnkey investor, you rely on a team to get the job done. Critical to that team is property management. 

And what’s the most essential quality in your property manager? Proactive communication. 

A survey shows that, aside from rent costs, the number one most cited reason for rental residents to forgo lease renewal was an unresponsive and ineffective property manager. 

Further Reading: Crucial Questions New Investors MUST Ask a Property Management Company

Resident retention is the investor’s best avenue to reliable cash flow. Vacancies cost money – costs for lost rental income, preparing for the next resident, and marketing the property, to name a few! As a real estate investor, one of your top priorities – regardless of your strategy – is to keep good residents for the long haul.

But how do we do that? What do retention rates mean? How are they calculated? Keep reading to find out more!

How Retention Rates Work

We can talk about metrics all day, but they’re useless if we don’t understand how to calculate and interpret the data! Generally speaking, your rental property retention rate is calculated by dividing the number of residents (or renter households) that moved out during a twelve-month period by the total number of residents/households you had over that same period. Then, multiply that result by 100. 

Knowing who to partner with as a new real estate investor isn’t easy. As an owner-investor, due diligence rests on your shoulders from the beginning. To be a passive investor, you must first find the right property management company. The quality and integrity of their business will guide your success.

Now, there are many elements to vetting a management company – looking at their public information, reviewing their quarterly and annual reports, and soliciting reviews from other investors. But perhaps the most critical step for a new investor is asking questions.

Plenty of inexperienced real estate investors choose to fly solo. They imagine doing it all themselves will save money and leave more rental income in their pocket each month. While this is true, their overall portfolio will suffer in the end. Doing it alone stunts and limits your growth, which is critical for building lasting wealth across multiple income streams.

At REI Nation, we value property management because we're investors ourselves. Our processes are designed to maintain and care for your properties as if they were ours, because that's exactly how we got started!

However, if you're continuing your search for the right fit to manage your properties, we highly recommend you do your due diligence. 

Building a real estate investment empire isn’t about owning the most properties, charging the highest rates, or investing in the most luxurious markets. Success as an SFR investor comes through a high level of service and consistency. Your greatest asset apart from your properties is the people inhabiting them.

The bigger your real estate investment portfolio grows, the more diligent you must be in wealth management.

Property management is one of the toughest jobs in the world of real estate investment. Pleasing and retaining residents, ensuring properties are well-taken care of, and protecting your investments on the day-to-day is an often under-appreciated but critical part of your success.

After 15 years, this week, Memphis Invest celebrated closing on our 5,000th property!

This is a HUGE milestone for us, and also for the people that helped get us to where we are. From our clients, to our staff, vendors, and residents, we are extremely grateful for everyone that has been a part of growing our company and our vision.

As real estate investors, we all want our properties to stay in tip-top condition. After all, a rental property in good condition means it shows better, retains and accumulates better value, and better satisfies our residents. When we’re not actively working to improve the condition of our investment properties, we certainly don’t want them to be damaged.