Tenant turnover is often one of the most expensive problems landlords face in real estate.
With inspections, renovations, and repairs to pay for—in addition to advertising and screening costs—it’s best to avoid vacancies altogether.
But how do you prevent vacancies? By maintaining a healthy tenant retention rate, you can avoid vacancies and keep tenants around for the long term.
What’s more, long-term renting also means building strong, lasting relationships with tenants. Those relationships turn into year-after-year renewals and create a steady revenue stream.
Here are five tenant retention tips you can easily incorporate into your rental business.
1. Screen All Tenants
The importance of tenant screening for healthy retention cannot be understated. If you’re looking for long-term tenants, the fastest way to find them is to choose like-minded tenants from the start.
While screening, include income, credit, criminal, and eviction checks. Always screen every tenant the same way, and don’t forgo a certain check just because you think it’s unnecessary.
It’s also crucial to follow up with the references tenants provide on your rental application. Asking prior/current landlords and employers their insight on an applicant can tell you whether they would be likely to be looking for long-term housing.
2. Prioritize Communication and Customer Service
When tenants feel welcomed and cared for, they are much more likely to stick around. For this reason, you should prioritize communication and customer service in your rental business if you’re looking to attract long-term tenants.
Excellent communication and customer service means replying to tenant questions and concerns as quickly as possible and providing top service. Don’t neglect messages or leave tenants to figure something out on their own. If a problem prevents a tenant from living comfortably in the units, it’s your responsibility to address it.
Tenants also value honesty and transparency. If you can’t offer a service or answer a question immediately, be honest about why not.
Tenant communication is much easier with a digital tool to organize your tenant conversations. If you use property management software, the chat feature on your platform is your friend. With software, you can easily reference previous messages, receive notifications, and organize your conversations separately from other work or personal ones.
3. Keep Up with Maintenance
Speaking of good customer service, this includes providing maintenance services. Keeping your rental properties in good condition is not only a concern of your tenants—it’s also beneficial for you. Keeping up with maintenance means fewer repairs to worry about down the line.
Tenants can submit maintenance tickets on their property management software accounts. As you receive them, you can assign them to the appropriate maintenance personnel, track the ticket’s progress, and follow up with the tenant to ensure they are satisfied with the job.
Tenants who see you let problems go for days or weeks are not likely to want to repeat the experience by renewing their lease. Stay on top of maintenance for your best chance at lease renewals.
4. Offer Incentives
Incentives are another great way to increase renewals and tenant retention rates. Renewing a lease is a significant decision for tenants and is informed by many factors. Reward tenants who choose your properties again with small perks.
For example, maybe you offer discounted rent for tenants who renew their leases early. This incentive is best when offered relatively early, when tenants are not as likely to have had time to search for new housing.
Other ideas include offering small bonuses or refunds, property upgrades, or partnering with local restaurants or other businesses to offer discounts.
5. Be Flexible
If a tenant intends to leave unless you can make a substantially better offer, this situation requires some flexibility on your part. This means possibly negotiating critical lease details with the tenant to convince them to stay.
While many landlords will resist lowering rent for a tenant, consider the potential costs. It’s true that a brand-new tenant would likely pay the original price. However, you’d need to pay for everything involved in tenant turnover, including vacancy time, cleaning, repairs, renovations, advertising, and tenant screening. These costs can quickly add up and are often more costly in the long run.
If persuading a tenant to renew means being flexible, consider whether this reward might be well earned by a good tenant and possibly benefit you as well.
Improve Tenant Retention with Property Management Software
Tenant retention is the goal of every landlord or property manager. While tenants will always move out on their own timelines and terms, there is much you can do to prolong the time tenants stay renting your units. By utilizing tools like property management software to keep on top of screening, communication, and maintenance, as well as adding some incentives or flexibility, you can quickly and effectively convince tenants that it’s in their best interests to stay.
