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The Surprising Truth Behind Tenant Turnover

by Paula Pant on December 18, 2013 · 15 comments

  
Tenant Turnover

A few weeks ago, I had a conversation with a friend of mine. She rents an apartment in a large complex. She mentioned that she’s planning on moving out at the end of her lease term.

I asked her why she wanted to leave, and she named several minor problems with her apartment.

She felt the dishwasher was a little bit too old and loud. The sliding door around her balcony leaked a little bit of air and needed new weather-stripping.

As a landlord, none of these seemed like major issues to me. If I had a tenant who requested more weather-stripping, I’d happily give them some. After all, it’s an incredibly reasonable request.

I’ve been to her apartment and I can vouch that her dishwasher is truly old. It’s definitely on the verge of needing to be replaced. And her sliding doors probably do need weatherstripping. In other words, she isn’t asking for anything unreasonable.

An Unreasonable Request?

I asked my friend if she has mentioned any of these issues to her landlord. She hadn’t, she said, because she felt that none of these were the types of issues that she should ask her landlord to fix.

The dishwasher is loud, but it’s not broken. The doors leak some cold air, but she didn’t feel she could ask to have it fixed.

Instead, she just stayed silent and allowed these minor issues to wear on her, little by little, until it finally caused her to decide to move out.

Understanding Why Tenants Leave

After this conversation, I started to get a better idea of what causes tenant turnover. Sometimes it’s the small issues within our units that cause tenants to leave.

These are the types of issues that don’t necessarily incite a repair request, but that do wear on a tenant’s nerves, and prompts them to start look for better, nicer places.

This leaves you, the landlord, with a vacancy you need to fill.

How can we landlords avoid these issues?

#1: Go above and beyond.

Many landlords warn against over improving the property, but I tend to approach my properties with the opposite mentality.

I pay close attention to detail, and try to ensure that the tenants have a fantastic living space.

My theory is two-fold:

  • Treatment - Tenants are more likely to treat a property well if the property is in good condition.
  • Turnover - The number of small, minor inconveniences that tenants won’t complain about, but will move out as a result of, will decrease.

#2: Send out a survey.

This is an idea that I’m toying with. Many large apartment complexes and multi-unit properties do this.

They use third parties, such as residentsurveys.com, to acquire anonymous feedback from their residents.

They send out resident satisfaction surveys, maintenance satisfaction surveys, and move in follow-up surveys. These surveys provide the landlord and property manager with the feedback that they need in order to have happy residents.

As a small-scale mom and pop landlord, however, this is harder to do. I can’t sign a contract with a big third party, because I only have six units. But I could create a simple survey using surveymonkey.com or even a Google survey, and distribute these to my residents.

It’s true that it would be much harder to guarantee anonymity when I have so few residents, but perhaps it may be an effective tool for acquiring feedback.

#3: Send periodic email.

Every now and again, I’ll send an email to some of my tenants to just say hi, and ask how their unit is doing.

I’ll invite them to let me know if there are any questions or problems that they’d like me to address.

Sometimes the tenant may not take the initiative to voice a problem or concern. If you take the extra step of asking them, they may feel more comfortable speaking out.
Photo Credit: sean dreilinger

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{ 15 comments… read them below or add one }

Lisa Phillips December 18, 2013 at 3:35 pm

Very nice and thoughtful article. Thanks Paula,

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Gerald K. December 18, 2013 at 4:06 pm

Agreed. Some tenants will not bother you at all. It’s good to check in with them once in a while. The survey is a great idea or offering an upgrade along with lease renewal time – especially for good tenants and for things you need to replace or add anyway.

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Cheryl Carrier December 18, 2013 at 4:08 pm

Nice post Paula! I’d hate to lose a good tenant over such minor stuff. Turn-over is a killer! I send e-mails a few times a year to say hi and ask if they need anything. I agree with you about upgrades and being responsive. I am also too small (20+ properties) to hire a formal survey. I do get tenants calling me often to see if I have other properties available for their friends – I rarely do.

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Dawn Anastasi December 18, 2013 at 4:53 pm

Also keep in mind that people’s perception is also based on their past experiences. If someone had a landlord who they complained about issues to over and over again, and nothing got fixed, they may not tell a new landlord about things because they’re used to things never getting fixed and so they’re of the attitude that it isn’t worth it. But not all landlords are like that.

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Cheryl Carrier December 18, 2013 at 5:07 pm

Some also believe that their rent will be raised if they have a repair. This is one reason that I don’t require tenants to make minor repairs or pay for repairs under a certain limit. In addition, some may not call because they caused the problem or the place is a mess – this is why regular inspections are important. I learned this lesson the hard way.

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Gerald Harris December 18, 2013 at 6:09 pm

Every tenant is different. There are certain things that bother some people that others absolutely don’t ever care about. I definately agree about the sending out a property survey. This allows the property owner or management company to take action to improve any of the minor issues with the property. It seem as though the little things make a big difference especially when it comes to people. Good Article!

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Thomas McCombs December 19, 2013 at 8:19 am

I think all property managers should send out these kinds of periodic surveys/questionaires. It would have to be helpful on any number of levels.

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Ian Kuchman December 19, 2013 at 9:03 am

I agree that landlords/property managers should allow open communication with their tenants. At least in my experience. Every month (if I can) I ask how they are doing and if their apartment is working for them. This opens the door for their issues, and they mostly have no restraints on telling you what’s bugging them.

The only problem is, most “slumlords” intentionally put up this barrier to communication so that they don’t have to make a decision to spend a little bit of upkeep money. That’s why there are buildings in my area that are vacant, boarded up, and eventually leveled. Pitty.

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Ben December 19, 2013 at 12:13 pm

I just got back from a quarterly maintenance inspection, and made a point of asking if there were any other things that needed doing. I emphasize that it’s important to catch small things before they get bigger.

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Jen Kurtz December 19, 2013 at 12:24 pm

Paula,
I agree with you without a doubt. It’s real simple, tenants are either leaving involuntarily because they cannot afford the rent or being evicted (which hopefully you screened your tenants well enough to avoid this outcome, or they are leaving on their own regard. If they are leaving, there is really 2 common reasons– they are relocating to somewhere new entirely for work or family reasons. If they are staying in the genera area, then they feel like there is somewhere else that can give them a better bang for their buck. It’s best to check up on those silent tenants too and make sure they know there is a pulse out there that does care about their home and if they are happy!

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Geoff December 19, 2013 at 1:40 pm

Great article, these ideas are critical for landlords. I have been spending a lot of time/energy into tenant retention and I’ve come up with a few changes, mostly in attitude. I look at it from a customer service standpoint more now. You want weatherstripping? No problem. You want a new gate? OK. You want an extra space heater for the dead of winter? Sure. Oh yeah, howabout signing this one page lease extension and locking in your current low rent payment for another year? Is it a pain in the butt? Not really. If you don’t like talking with people, you shouldn’t be a landlord or provide any service to people in general. You know what’s a pain in the butt? Vacancy. Vacancy kills. How much do those above issues cost me? Probably $200. How much is a vacancy? $2000? I recently bought a tenant $1500 in new appliances in exchange for a 2 year lease agreement. That house rents for $1000/mo and was gonna need new appliances anyway. 45 days of rent pays for appliances that will last 10+ years. I now require my maintenance guy to respond to requests in less than 24 hours. I figure out what market rent is and charge 5-10% less. I just sent everyone a Christmas card with a $25 grocery store gift card. My wife thinks I’m nuts to spend $500 on gift cards “because she never got that when she was renting”. That’s my point exactly-be different. Appreciate your tenants, let them feel as though they can ask for creature comforts. Consider lowering rents by $10/month for lease renewals, consider rent discounts for payments made before the first of the month. I am a huge believer in inspections and I do them 2 times a year and I always find things. The tenants really appreciate the attention. Don’t be cheap on materials or repair methods. Try and think of every conceivable reason they would leave and do something about it-now!

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Pete December 19, 2013 at 4:19 pm

All good ideas. On the improvement end, the items mentioned would likely be no problem for any landlord that was aware they were an issue. Needs have to be fixed, but there also needs to be concern of over-improving properties that dont support that expense.

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Sharon Vornholt December 19, 2013 at 9:26 pm

Paula -

Excellent policies! A lot of landlords “hide” from their tenants. They are afraid to contact them; they are afraid of of requests for maintenance. Crazy isn’t it with the price of tenant turnover?

Sharon

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kathy December 23, 2013 at 9:42 am

I agree you should maintain your properties and keep good communication going with tenants. I love texting. Just the other day a tenant texted me with a water problem so I immediately called her. It sounded serious so I immediately sent my handywoman over to see what was up because I couldn’t go. My handywoman easily fixed the problem and while she was there she replaced the faucet that was “hard to turn” and plunged the sink. I plan to buy the tenant some more enzymes and drop it off next time I’m going past her house. This tenant asked my handylady if we had a 4 bedroom home that she could rent. Unfortunately right now we don’t otherwise I would offer it to them. Actually anytime a tenant calls I like to go over there or send someone to investigate the problem to determine our plan of action.

When we redo the yearly lease at the property I take a casual look around and ask if there are any problems or concerns. We usually visit for quite awhile and they tell me what is going on in their life. Then I make a plan to take care of anything the tenant mentions. We rent single family homes. Exterior maintenance, such as caulking, touch up painting, brush trimming if needed (depends on tenant, some garden, others don’t.) is done every year. Our tenants stay several years. So far we have only raised the rent between tenants because a vacancy can cost 1-2 months rent. Until 2 years ago rents in our area had stayed the same for over 10 years but taxes and fees keep going up in the eastern county. We rent across 2 counties. Now rents in our western county rental area are going up and the ones in the eastern county area are staying about the same. Although I think with recent law changes allowing city workers to live outside the city will cause the eastern county area rents to start going down and lower the quality of tenants. Since it costs more to operate in this eastern county due to city regulations, high city fees, and higher taxes, we have decided to stop investing in this county. So as our properties in this eastern area become vacant I plan to sell them.

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Shaun December 29, 2013 at 3:26 pm

Ouch!
That is pretty small stuff to move over.
Are those really the only reasons she has?

Did you mention that she should tell them her issues?
They might fix them and would save her a lot of hassle too.
It isn’t cheap or easy to move either so it is really crazy for both sides to go through a move if the reasons are minor.

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