Improving Tenant Retention – Lowering Tenant Turn Over
Property owners, landlords and property managers are constantly faced with two dilemmas when it comes to tenants, effective acquisition and low cost retention. Once a property owner, landlord or property manager acquires a tenant, a few actions and expenditures will help insure the tenant will stay in the property for an extended period of time while remaining content with their decision to stay in the property. The following are three areas of concern which will address both issues when it comes to tenant retention.
1. Capital Improvements
The number one reason tenants leave a property is the property owner, landlord or property manager has not demonstrated pride of ownership. When an owner replaces a dilapidated fence, or professionally repairs plumbing concerns, or replaces old worn carpeting, the owner is giving the tenant a feeling of pride towards the tenant’s decision to live in the property. Most people take pride in showing off their house to their friends and family. When items in the house are broken, not working properly or in general disrepair, the tenant is embarrassed inviting friends and family for gatherings. Small, frequent investments towards an investment property can keep a tenant content for a long period of time creating a positive ROI.
2. Keep Property Clean
This goes along with the first area of concern. Few people want to live in a dirty, unkept property. Another way to put this is called the property’s curb appeal. When we are out looking for houses to purchase, Realtors state “Curb Appeal” is the property’s “First Impression”. If the property has uncut yard, trash throughout the yard, prior tenant’s belongings inside the property, dirty windows, fingerprints on walls/doors throughout the property, and baseboards used as dust collection ledges, prospective tenants will pass in favor the property owner who tends to those items and presents a clean house.
3. Hold Tenant Accountable
Property owners that want to be the “nice guy” to their tenants are doing no favors to themselves or the tenant. By treating tenants as adults, property owners are demonstrating to the tenant both parties are held accountable to each other. If the tenant is late with the rent payment without prior notification, the property owner should show no remorse and enforce penalties described in the lease contract, i.e. late fees, eviction processing, etc. The “nice guy” property owner, who allows the tenants to constantly pay rent late without consequences, will find it difficult month after month to keep their financial obligations current.
In today’s real estate market, with an abundance of low priced real estate, more and more individuals are entering the investment property arena. With no prior experience in dealing with tenant’s, first time landlords who do not start out initially with the correct attitude towards their tenants, will find it more difficult to change course in time. Like with any long term endeavor, if we start with poor habits we will continue the same poor habits while complaining about the hardships our poor habits created.