What is your plan for retaining your residents? Holding on to good tenants is an important part of succeeding with an investment property.
Retaining tenants minimizes vacancies, and that’s important to what you’re earning in both the short term and the long term. Some of the highest costs that landlords have to face is turnover. The expense involved in preparing a property for a new tenant can be high, and when a tenant moves out, you’re also dealing with the cost of marketing, leasing, and screening. All while there’s no rent coming in.
When you place a good tenant, you want that tenant to stay in the property for as long as possible. Here are 5 simple ways you can keep your tenants renewing their lease agreements year after year.
1. Keep Communication Open and Positive
Think about how you’re communicating with your tenants, and more importantly – whether you’re listening to them. Tenants want to be heard.
Establish a relationship that’s based on transparent communication. Check in with your residents from time to time to make sure the property is in good shape and to find out if there’s anything they need. Tenants should not only hear from you when something is wrong.
Tenant relationships are an important part of retention. If you need to call your resident because rent is a couple of days late, be empathetic and understanding. Talk about making a payment arrangement or collecting a partial payment now and the rest later.
Respond to tenant phone calls and messages. Even if you can’t help them right at that moment, explain that you’ll need to do some research and talk to some other people, and you’ll get right back to them when you can. Don’t leave them hanging feeling unheard. It’s demoralizing, and will lead to a vacancy at the end of the lease term.
2. Are You Allowing Pets?
Pet-friendly properties do a better job of retaining tenants, and there are actual statistics to prove this. When tenants with pets move into a pet-friendly home, they’re more likely to stay there because they know that not all rental properties will accept pets. They also have to pay a pet free and/or pet rent, and paying that fee again in a new place every year will get expensive.
It’s more cost-effective for your tenants and better for their animals to stay where they are.
You can leverage this by allowing pets in your rental property. This can come with risks, and we know some owners hesitate, but it’s really better for your bottom line and much better for your retention potential. As long as you have a strong pet policy in place, you will protect your investment from potential damage.
3. Be Mindful About Rental Increases
Raising the rent every year when the lease renews is typical, and most tenants in central Florida will expect a higher rent from year to year, especially given the way the market has been performing recently. You can definitely feel okay about raising your rent.
Our advice is to be strategic.
There’s no need to increase the rent by a large amount every year, especially if the market doesn’t support it. Make a smart increase that covers your own additional expenses but doesn’t chase away your great tenants. Rental prices in our area are high. When your current residents take a look around before deciding whether or not to renew the lease, they’ll see what they’d have to pay elsewhere, and if your offer is slightly less than that and they’ve enjoyed renting from you, it’s a safe bet they’ll stay in place.
When you have great tenants in place who pay rent on time every month, keep the property clean and in good shape, and take care of minor issues around the home themselves, you want to retain those tenants. These are the residents you’re hoping to renew year after year, so implement a small increase that matches inflation and the market rental values. You don’t want to be at the high end of what similar properties are renting for. Keeping a good resident in place is more valuable than a couple of extra dollars in rent every month.
4. Providing Responsive Maintenance
Responding to maintenance requests is important to your tenants, and it’s also important to the preservation of your property.
Treat both emergencies and routine requests with a sense of urgency. Keep tenants informed throughout the process. If it’s taking a bit longer to get a vendor out, let them know.
When you respond quickly to maintenance needs, tenants feel like you’re taking them seriously and that you care about their comfort and happiness. One of the main reasons that tenants leave rental properties is because repairs were not taken care of in a timely manner. Don’t lose tenants this way; make the repairs quickly. Not only does it retain tenants, it also protects the condition of your investment.
5. Beyond Maintenance: Provide Upgrades and Updates
Incentives can go a long way in keeping your tenants in place. When you’re looking for ways to motivate them to renew their lease agreements, consider making some improvements to your rental home.
During the lease renewal period, improvements can be incentives.
Offer hard surface flooring or new carpet. You can provide a fresh coat of paint or replace an aging appliance with something new and energy-efficient. If your tenants make a specific request, consider it carefully. Making the upgrade will likely cost you less than the turnover and vacancy expenses that come with finding a new tenant and preparing the property for a new cycle of marketing and showings.
These are some general ideas about how to retain tenants. If you’d like some specific tips that are geared to your unique rental property and the tenants who live there, let us know. We’d be happy to help.
Contact our team at Park Avenue Property Management. We work in Lake Buena Vista, Orlando, Kissimmee, Celebration, Maitland, Altamonte Springs, West Palm Beach, Tampa Bay, and throughout central Florida.