Residents are the bread and butter of real estate investment. Because they are the source of our cash flow, it’s critical that we place value in tenant retention. In a market where tenants are abundant, it may be tempting to think that your tenants are dispensable and replaceable: but don’t be fooled.
Memphis Invest has built its' reputation among real estate investors with incredible customer service. But that customer service reaches far beyond just the investor. Over the years, we have learned and developed our own way of treating tenants and built an equally good reputation within the rental and property management communities.
Premier Property Management of Memphis and PPMG of Texas are each routinely out-performing local data with shorter vacancy periods, longer occupancy periods, higher rental rates and fewer delinquencies and eventual evictions. Our tenants have become a cornerstone of our companies' success. Treating them firmly yet fairly has become the mantra of our team.Yes, you can get another tenant. You can probably fill a vacancy pretty quickly.
But a good tenant is worth keeping, and turnover of any kind is costly!
Why Resident Turnover Is Expensive
- Vacancies halt your cash flow.
- Deep cleaning must be done between tenants.
- Repairs, painting, and other maintenance is done.
- Listings are paid for and posted.
- Showings may be held.
As an owner, you aren’t directly involved in retaining tenants: that falls to your property management team. Knowing the best practices for tenant retention, however, is a great way to vet and identify good property management companies and ensure that your managers are doing the best job they can to maximize your positive cash flow.
If you know how it works, you’re better in-the-loop on what really impacts your bottom line.
7 Ways to Boost Resident Retention
1) It Starts With A Great Renovation
Before you can start thinking about renting a property, you have to pay attention to your renovation. After all, the type of renovation you perform is going to play a big role not only in the eye of tenant that you attract, it will also play a big role in keeping that tenant.
Forget Rent Ready
The phrase rent ready was made up by landlords to justify spending less money on properties. In reality, rent ready should mean that you have done everything you can do to attract the best tenant at the highest possible rent and prepared them to stay in your property for as long as possible. You accomplish that by addressing deferred maintenance issues, repairing your property above and better than a renters other possible choices nearby and making your property sparkle for prospective tenants.
The first impression you make will go a long way in keeping a tenant for a long-term and keep a property positive cash-flowing.
2) Act Like A Pro & Promise Only What You Can Deliver
Like anything else in life, that first impression matters. Most of the time, that first impression comes in several different forms. First, your property has a first impression and if it is clean from the outside and has a reasonably professional sign advertising the property, you are off to a good start. Second, when a prospective tenant calls to inquire about a property, answer the phone professionally and be prepared to give answers on the property.
Sell it with positive words and highlight the features that are most in demand at that time. Such as a fireplace in winter or a covered patio to sit on in the summer. Ask the right questions on the front end and highlight the features that fit the answers you get.
Next, when setting an appointment to show a property, make sure you are dressed properly, on time and representing the property and your property management in the best way possible. All of these impressions are important and if you promise great service once they are in the property, give great service on the front end. Be respectful, be clear, be concise, be on-time and set the tone for a great future.
3) Keep Your Lease Agreement Clear and Reasonable
One of the easiest ways to self-sabotage is to present a tenant with a lease agreement that is a) unreasonable and b) difficult to understand. Even though it is a legally binding agreement, it doesn’t have to be overly complicated. It doesn’t have to be difficult or ridiculously strict. You want to cover your bases and protect your assets and yourself, legally, absolutely.
Alienating your tenants with a bad impression either by being confusing or unreasonable, however, isn’t going to encourage them to stick around.
4) Value Resident Concerns
Your property management should always be responsive to tenant concerns. That doesn’t just include things like maintenance requests, but security concerns as well. Your managers should take your tenants seriously, even when if it turns out to be a small issue or a false alarm. Will it be annoying? Yes. But it’s always better safe than sorry, for both your tenants, your property, and your liability.
Listening and responding well to tenants makes them feel valued and secure, something that will keep good tenants around.
5) Communicate With Compassion
Communication, especially face-to-face communication, isn’t something all property managers give to their tenants. Make sure your managers are kind and value customer service. Rudeness should never be tolerated! Are your managers caring? Compassionate? Kind? While you may not deal with tenants face-to-face, your managers represent you. They are your face to the public, and your investment success hinges on the job that they do.
6) Prioritize Resident Screening
Tenant screening, as always, is crucial. It reduces greatly the chance of having to evict a tenant, and generally ensures that you keep the kind of tenants that you want to retain. You property managers should be taking that extra time to screen tenants before they sign any leases.
7) Treat Old Residents Like New
After some time living in your rental property, it can be easy to take reliable, old tenants for granted. Just because they’ve been renting for awhile doesn’t mean they’re a sure thing! Don’t let that be an excuse to slack on customer service—just an indicator that your managers have been doing something right so far. Treat your current tenants like you would new ones.
8) Spruce Things Up
Don’t just focus on treating tenants well—treat your investment properties well, too! Updates, a fresh coat of paint, landscaping, and other details that make the place feel new, fresh and inviting are the kinds of things that keep tenants coming back. Just because an old appliance still technically works doesn’t mean you should necessarily keep using it until it gives up the proverbial ghost.
9) Consider Incentives
By the same token, what incentives can you offer your tenants? New appliances (that needed replacing anyway)? Grocery store gift cards? New paint or carpet? Updated fixtures? There are plenty of perks you can offer current tenants if they stay that you would be doing anyway between tenants, while still saving you the hassle of looking for a new tenant altogether.
At the heart of real estate investment, there are people. Real estate investors tend to get removed from the forward-facing interactions between tenants and managers, but they’re crucial to your success.
Tenant retention and excellent customer service are priorities that don’t need to get lost in the shuffle—if they do, trust us, you’ll feel it financially. When you start investing in real estate, invest in premier property management and invest in people.
Your bottom line will thank you.