BiggerPockets

Retaining Tenants – Keeping Vacancy Rates In Check

I don't know about you, but I hate filling vacant units. Maybe hate is a strong word, but searching for tenants, screening tenants, and doing showings just to fill a single vacant unit is a major pain.

So what does an enterprising property manager like yourself do? Get your current tenants to stay so you don't have vacant units in the first place.

Why spend time and money to repaint, clean, and advertise the unit when you already have solid tenants that pay their rent on time? Though not always easy, it's almost always cheaper to retain great tenants rather than finding new ones.

So how do you keep great tenants? Commonsense stuff that's not always so common:

Make things easy
Let's face it; life is complicated. But renting from you doesn't have to be. Look for ways to make things easier for your tenants by taking advantage of the Web. For example, instead of making your tenants pick up the phone every time they need something from you, let them report repair items online. Instead of making them mail their rent check each month, let them pay electronically. Don't have the mad programming skills to do it yourself? No problem. You can find a number of low cost options for both by searching online.

Ask for feedback
It sounds simple, but the best way to know what your tenants are thinking is to ask them. Ask them how you're doing and what you could do better. Ask them for their ideas and suggestions. When you do get feedback from your tenants, acknowledge it and tell them what you plan to do. You don't have to do everything they suggest, but if you commit to doing something, follow through.

Invest in the property
Many inexpensive improvements can go a long way toward making your tenants happy. Whether it's repairing the broken light or repainting the hallway, improvements like these show you care while helping to maintain the value of the property.

Explain rent increases
You may have happy tenants today, but their happiness may wane if you increase rents without doing your homework. First, research the market by checking out the competition; Go to Craigslist to see what similar units in your area are renting for. Then if your tenant baulks, you'll have the data to backup your increase.

Give incentives to stay
Giving a free month's rent is almost always an unwise decision to retain a tenant, but you may need to offer some kind of concession to compete with other properties. If competitors are offering incentives to get your tenant, a small incentive to keep them might be a wise investment. Sometimes leaving rent untouched is incentive enough. If the tenant is aware of your desire to raise rents, they'll see their stable rent as an incentive to stay.

Bottom line: Retaining tenants minimizes vacancies and turnover, saving you time and money. By making things easy for tenants, listening and responding to their feedback, maintaining your properties, explaining rent increases, and offering incentives, you'll help keep those vacancy rates low, right where they belong.

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