So you went through the tedious tenant screening process, checked credit scores, called references, and now have great tenants in place. Keep them! New tenants are an uncertainty, and tenant turnover is costly. According to Real Property Management Express, “Whenever a tenant leaves a property, making the property rent ready and finding another qualified tenant costs money. The national average cost of a turnover is equal to three months’ rent not including the lost rent during the vacancy.”
A tenant retention plan is a way to keep your quality renters, and doesn’t have to be elaborate. While life happens and people move on, these tips are sure to keep your tenants happy and wanting to stay.
Start the Lease Off on the Right Foot
Moving is often considered one of the top life stressors — right next to divorce, the death of a loved one, starting a new job, and getting married. As a landlord or property manager, you have an opportunity to ease the stress of a move by providing your tenants with helpful information about the neighborhood that will reduce stress on day one. Providing this information will further establish your credibility and be an initial step toward tenant retention.
We recommend putting together a tenant welcome package that includes:
Provide tenants with important phone numbers, processes for maintenance and rent payment, and any other key details they need to know, such as:
- Trash Day Details: Do not tell your tenants in the middle of a move to ask a neighbor for information on trash day. Additionally, many trash services will not take excess trash, so give your tenants that information.
- Mail Information: This is particularly important if your rental’s neighborhood has cluster mailboxes. Nobody wants to be in the middle of a move and trying every single cluster mailbox to see if the key you provided them with works. Tenants also generally would prefer to avoid a trip to the post office when they are still getting settled.
- The utility providers and contact information: Particularly if the tenant is responsible for paying utilities, do not make them jump through holes to find out who the provider is and how to contact them. It’s also mutually beneficial for both parties to provide utility transfer instructions.
Area Related Information
Tenants who are new to the area will love to know about local restaurants, movie theaters, parks, and any other recommendations in the neighborhood. Get creative and put in take-out menus, coupons, or even a TV guide to help the new tenants feel more settled.
This doesn’t have to be a large expense. Here are some small gestures that can go a long way:
- Branded Gifts: Do a little company marketing here. Put a few pens or a mug with your logo on it. These items can be inexpensive and can benefit your business.
- Things They Need: Give them toilet paper or cleaning supplies to start off.
- Food Gifts: Provide a box of chocolates or some cookies from a local baker.
Know the Moving Trigger Points
Sometimes, tenants move on for reasons outside your control, such as a marital change or a new job. Yet some of the most common reasons tenants move are preventable. AppFolio, a leading property management software for landlords with 50+ properties, polled tenants to find out the reasons they move. Here are some of their key findings:
Some of the top polled reasons for moving, including a negative interaction and unresolved maintenance, are preventable. In fact, in their Property Manager’s Guide to Tenant Retention, ButterflyMX states that 60% of all tenant turnover is controllable. Keep reading for our tips on tenant retention.
Prioritize Customer Experience
“As a property manager, it’s important to take stock in your customer experience to make sure you’re not just meeting your prospects and residents’ needs, but exceeding them if you want to stay competitive,” says Brittany Benz of AppFolio. Benz further notes: “Customer service and loyalty plays a large role in a businesses’ success — across all industries.” Use these tips to create an optimal tenant experience:
Communication is key
Let your tenants know their concerns matter. Address maintenance issues as soon as possible, and if there is a holdup, communicate it. Give them a reasonable time frame of when their issues will be addressed, and let them know that you are on top of it. Also, be sure to follow up after the issue is resolved to ensure everything was completed to the tenant’s satisfaction. With all the high-quality property management tools available, tenant communication is now easier than ever.
Demonstrate small acts of appreciation
We already talked about starting off the lease with a welcome kit, but don’t end it there. Tenants want to feel appreciated for being quality tenants. Send them a holiday card during Christmas time, bring them doughnuts on National Doughnut Day, or simply randomly swing by with cookies. These small, inexpensive gestures will mean a lot and make tenants feel more at home.
Offer incentives for a lease renewal
If quality tenants are deciding between leaving and staying, give them a reason to stay. These incentives don’t have to be big or expensive. A mutually beneficial idea is to do some minor property upgrades, such as adding:
- LED Light Bulbs
- Smart Locks
- Security Cameras
- Smart Home Devices
- Spa Shower Heads
In our experience, even when small, incentives can be powerful.
Quality Tenants Make Or Break A Successful Real Estate Investment
Your monthly rent checks are the key to maintaining positive cash flow, so do your part to keep your quality tenants in place and avoid costly vacancies and turnover. Start your investment journey with the nation’s leader in rental loans. Contact us today for a competitive quote.