As a real estate investor, one of the most challenging aspects of investing has to do with other people. Specifically, with tenants. Search the Web and you’re bound to find thousands upon thousands of hits regarding bad tenants. Some stories are so horrible that the only thing you can do is laugh — maybe because you can’t believe it yourself unless it happens to you.
Tenants and the management, however, shouldn't be in conflict. Even if you are only the owner of a rental property as a real estate investor, understanding and working towards good practices when dealing with tenants is vital to the success of your business. If you hire a property management company, then it is extremely important to ask about their tenant relations programs. You want to know how they handle tenant relations and make sure the management is doing right by your renters.
Happy renters and better tenant relationships have been shown to increase length of occupancy, reduce maintenance costs while occupied and reduce repair costs after a tenant vacates. All of these improve the investment performance of a property since happy tenants make for happy real estate investors!
Why work on Tenant Relations?
The Importance of a Happy Tenant
What’s the big deal? After all, this is a business. Why should you bother to keep you tenants “happy”? Well, for one, a happy tenant is a tenant that sticks around. In real estate investment, your goal for maximum returns is to keep tenants for as long as possible — vacancies, renovations and finding new tenants are among the most costly processes in real estate investment.
In the interests of your bottom line, remember that tenants are your business partners. Happy tenants pay their rent, and that’s your positive cash flow. On top of that, your tenants have connections. If they’re happy with the way you treat them — with respect, attentive service and skill — tenants can become a great source for referrals, from clients to buyers.
Keeping a tenant happy is always good business sense.
Change Your Way of Thinking
Excellent customer service is not a matter of “grin and bear it.” No, tenant relations must be grounded in a genuine desire to do good work and treat people well. It’s an attitude and a point-of-view. There must be sincerity behind good tenant relations. Good service grows business and a good reputation, is something that can’t be bought and should never be taken for granted. That does not mean that you allow others to take advantage of you. Believe me, there will be plenty of frivolous lawsuits by ill-meaning tenants and lawyers that specialize in settlements. But those are so rare and so out of the norm that allowing the traditional pain points of tenant relations to deter you from great customer service.
Dealing with a Difficult Tenant
The tenant is not always right. However, the tenant is always your client and they should always be treated with respect and given a fair audience (as long as they are being respectful to you!). There is a way to deal with difficult tenants that keeps your from being walked over or taken advantage of. A tenant’s happiness should not be the ultimate measure of success if you’re bending over backwards to please them through cost and bad compromise. There will come times when you must be firm and collaboration with your tenants will be difficult, if not impossible.
Just remember that even the worst tenant is still a human being. Treat them that way. Respect and sincerity go a long, long way.
Memphis Invest, for one, is very proud of our customer service to both tenants and owners. Fair and honest relationships that are characterized by respect, compassion and sincere professionalism are vital to successful real estate investment.
What is your philosophy for making good tenant relations? Tell us in the comments.