Tenant Retention is the key to Profitability. Turnover is an ROI killer, meaning vacancies, which do not yield rent. Not only is losing a good long time tenant a shot to the bank, but finding another good long time tenant can be quite challenging. Sometimes understanding why tenants leave is important. They do not always tell us the exact reason. We can hear that they need more/less space, want to be closer to work, or that they are moving back in with family, but what internally prompts this decision. We are all motivated by something, and it’s 90% emotional vs. logical. Many people want to transform a rental house into a home. They want to feel good about where they live. What are some of the things that are yielding negative emotional feelings, which are keeping tenants from feeling like your rental is just a rental and not a home? What are some things we can do to make our tenants feel positive, more at home, and comfortable, so that we can retain them, and avoid costly move outs? The more they feel at home the longer they are likely to stay.
Here is a list of some retention ideas that can help you retain good tenants.
- Quick Response Time – As a property management company part of our retention model is to respond quickly. Help your property manager by responding quickly to calls from them. Some items need owner approval, and although a tenant doesn’t always understand this, in the event of an emergency, they are looking for a quick response. If you manage your own property, being responsive lets tenants know you care. And when you care about them, they will care about your property.
- Paint – Paint the exterior/interior of the house. Yes, people want relatives and friends who visit to have a positive response to their living arrangements. A front door alone can be painted to make the house more inviting. It is inexpensive and can make the entrance to the home more inviting.
- Thank you Card – Send your tenants a thank you card once a year. Thank them for being good tenants. Let them know you appreciate the fact that they have taken care of your property. A small gesture like this can have big rewards and make tenants more conscientious about how they treat the property.
- Appliances – There are many deals on appliances. Some are brand new with dents and scratches, and some are used. These appliances can be in better shape than the ones in the existing property. Replacing old appliances can make the property more livable and enjoyable for tenants, especially if they have been there for a long period of time.
- Reasonable Changes – Allow reasonable changes to the property exterior and or interior. If they want to spend the money painting, and it is a neutral color, let them! We had an owner that allowed his tenants to build a room addition with an approved licensed contractor. It came out beautifully. Can you guess who benefits with the extra square feet, both the tenant and owner? Make it known that you are ok with reasonable changes. Have them send you a list of possible changes for approval.
- Paying Half – Offer to pay half of the floor cleaning. Although it is the tenant’s responsibility, often times they do not pay for carpet or flooring cleanings. By paying half you can ensure that your floors get some longevity. If your tenants pay the other half, they will have some skin in the game, as they say, and might be less reluctant to spill their drink knowing they paid something.
- Property Improvements – Improvements can be very rewarding in the short and long run. Counter tops, flooring, bathrooms, and kitchens can pay dividends. Especially if the tenant is so comfortable they don’t see a reason to leave. When you decide to sell the property the upgrades you made can have a positive effect on property value and desirability.
- Follow up and Communication – Don’t just fix the maintenance issue, follow up and make sure they are happy with the fix. Instill a caring attitude and allow reciprocation to unfold.
Helping your tenants feel positive by transforming the rental house into a home, will not only garner more loyalty towards your property, but it will provide a basis for raising the rent. Tenant retention, especially with good tenants, is something to keep your focus on. In a way they are our customers. Keep your eye on taking care of your customers/tenants, and their emotional motives, and the long term rent will follow. Remember that Tenant retention is the key to profitability.