How To Keep Tenants Longer…and a Strategy For Finding New Renters

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As real estate investors, when we buy a property that we intend to rent to others, we’re doing so with the goal of receiving a return on our investment. Ideally, of course, we’d like to start receiving said return as quickly as possible. But what happens when, for whatever reason, the property doesn’t immediately draw a tenant? Or when we already have a quality tenant, but she’s thinking about moving out? What do we do?

If you answered, “cry softly,” “pitch a fit,” “pray,” or “consider a new line of work,” to that question, there’s good news: you’re not the first — and you won’t be the last — to think along those lines. Having a piece of property languish on the market without a tenant is not a fun position to be in. A vacant property is a property that’s costing you money, and it’s not just the rental income. A property that sits vacant still needs upkeep. You may have to spend money marketing the property. Property taxes and other miscellaneous expenses that are common to every property seem can become a much greater burden when there’s no rent money coming in to pay for them.

So what can you do to prevent these kinds of headaches — or to at least lessen their impact?  That’s what I’m going to talk about today.  Here in Memphis and in Dallas, we have developed a few techniques to help properties get occupied quickly and stay occupied longer.  While their is certainly nothing unique in how we do it or the steps we take, every thing we do is designed to keep an investors’ renters in their rental properties and cash in their pockets!

Don’t Let Them Become Vacant in the First Place

If your rental property already has a tenant, you’re off on the right foot.  If you have a quality renter who pays his rent (and pays on time), takes care of the property, and doesn’t do anything illegal or annoying to draw unwanted attention from the authorities or the neighbors, then this is a person you want to retain. With the progress the housing market is making, such tenants might be tempted to buy instead of continuing to rent. If someone has her mind set on making that kind of change, there may not be much you can do about it. But if she’s still on the fence, it makes a lot of sense for you to do what you can, within reason, to keep her around.

At our property management companies, being proactive is one of the best ways to retain great tenants.  Starting 90 days out you should reach out to your tenants and ask a simple question:  What can we do to keep you as a tenant?  So many times we have been told that this is a bad idea.  The naysayers always bring up the negative side like – what if they ask you to reduce rent?  Or – What if they ask you to fix something that is wrong?  Or – what if they ask you to repaint a room or clean a carpet?  My response is always the same…So what?  At least now you know exactly what it will take to keep that tenant and in almost every scenario those simple requests will cost less than a vacancy and prep for a new renter.  And what if the repair they are asking about is minor but left unchecked could lead to something major.  Is that not something you would want to fix as an owner or property manager?

Offering rental incentives to quality tenants to keep them around is one way to reduce the chance of having a vacant property. Doing so can seem a bit counterintuitive; after all, you want to bring money in, not dole it out. But if the cost of the incentives is less than the cost of the expense of dealing with a vacant property, then it can be a smart move.

Whether it’s a rent reduction (for a limited time), “X” months free rent, or painting rooms and cleaning carpets or even making minor repairs that may not seem major to you, but mean something to the tenant.  Incentives can let renters know you’re serious about keeping them around. This kind of incentive is a win-win: Your tenant gets something nice that positively affects her quality of life, and you get a perk for your property that can be an additional selling point to draw in future tenants.  Tenants love properties that are kept up to date and don;t show signs of a ton of deferred maintenance.

Use Existing Tenants as a Marketing Tool

As you probably already know, referrals can be a valuable marketing tool.  Why not use your current tenants to draw in potential tenants? In addition to offering incentives for retaining existing tenants, you can also reward tenants who bring in new renters.  You’d basically be employing your renters as bird dogs.  Instead of looking for quality properties, though, they’re searching for quality tenants, and they’ll be rewarded for their work with various incentives.  If you are a good property manager or landlord, offering a quality property and timely response to tenants request, then asking them to help you find tenants will be a no-brainer.  They will want to help you for two reasons.  First, they like you.  They will appreciate the way you treat them and the way you treat the property.  Second, they will be appreciative for the opportunity to get a reward for promoting your company.

Of course, there have to be stipulations. You’re looking for good tenants, so prospective renters still need to pass muster with a successful background check and interview.  And you’ll need to decide what conditions need to be met for the incentives to be rewarded: how long of a lease the prospective renters will need to sign, how long they’ll have to actually be in the property before you reward the incentives, etc.  But if you do it right, utilizing existing renters to market to potential tenants is a viable strategy.

With renting, as in any other form of “selling” the easiest “sale” to make is to an existing client.  Keeping a current tenant is no different.  The second easiest “sale” to make is to a referral.  These two strategies for getting properties occupied and keeping them occupied are the most cost effective and easiest to produce results.  They can help you as a property owner or as a management company to extend your average length of occupancy and in the end, put more money in your pocket!

Have you offered rental incentives to keep your properties occupied?  Have you found being proactive and using incentives as a good strategy with your rentals?

Photo: Jeremy Brooks

About Author

Chris Clothier

In 2005, Chris Clothier (G+) began working with passive real estate investors and has since helped more than 1,100 investors purchase over 3,400 investment properties in Memphis, Dallas and Houston through the Memphis Invest family of companies.


  1. Great article! There is a lot of truths in this article. I use some of these methods myself for my rental. One strategy I use is the reduction in rent of XX amount after 6 months with on-time payment and with no problems.

  2. Chris –

    I really believe in trying to keep your good tenants, and I think the best way to find out why they may be considering moving is just by asking them. I once had a tenant tell me that they had found a house that had ceiling fans. They were willing to pick up and move when all they really wanted was a couple of ceiling fans and a little cooler house.

    It’s expensive when a tenant moves to turn a property. So when it’s time to contact your tenant about renewing their lease, why not offer them a choice of incentives to renew early? Get that new lease signed a month or two early.

    Maybe they want the carpet cleaned, the grass mowed free for 1 month, a couple of ceiling fans, a new microwave, or anyone of a menu of “$100 – $200” things. Maybe they want the living room painted and the carpet cleaned. You could say, “OK or OK if you renew for ____ months”. Just get creative. Like you said, it is always cheaper to keep a good tenant than find a new one.

    Great post.


  3. Chris,
    Great topic. I think landlords could put together a list of 100 different ways to attract and keep good tenants. You hit on some key ideas.

    I demand that my PM’s answer maintenance calls quickly and resolve them promptly. I don’t care if its a broken light switch cover. I also like to do improvements while the tenant is living there. One property I added a dishwasher, on another I added artificial grass. I plan on adding AC to another. I have many single moms in my properties, I offer to install a security system at my cost if they cover the monthly fee of $15. Yes, these are improvements I planned on doing, but why wait for turnover. I don’t use those improvements as an excuse to raise rents either. The golden rule applies here as well as anywhere else.


  4. Great reminder, Chris.

    We do what we can to keep tenants – take care of their needs immediately as they arise by having online repair requests and 24 hour response times. Communication is key and being available to your tenants.

    Yes, we have lowered rents to keep good tenants, especially over the past few years. When a good tenant turns in a notice, we call to see what they need and why they are moving. It’s always important to keep the good ones and the money lost in having a property vacant only one month can go a long way toward keeping the tenant you have.

    Finally, if they are set on moving, we send a “we’re sorry to see you go” letter with a list of what their moving costs will entail: first month’s rent + deposit on their next place, time involved, moving truck rental, utility deposits, pet fees, etc. We have had people change their mind after receiving the letter. Sweet.

    (There are, of course, from time to time those tenants we celebrate losing!)

    Thanks for your post.

  5. Great Post and nice comments, I will forward this to few landlords I’m sure they will find these strategies helpful especially the part “Use Existing Tenants as a Marketing Tool”.

    Thank you Chris Clothier 🙂


    • Chris Clothier

      Hey Jaz –

      If you treat tenants right – the way they are supposed to be treated – they will absolutely sing your praises to family, co-workers, people in their exercise classes, church, parents at their kids school…

      You name it, if you treat them right and then ask for their help, they will give it to you.


  6. Al Williamson on

    Nice work Chris,
    I once offered a generous reward to my tenants if they brought me a qualified applicant that sign a lease. It worked once.

    My new plan is to maintain an email list of my current and past tenants. I plan to email the list whenever I have a vacancy and offer a finder’s fee. We’ll see how that works.

  7. This post really inspired me. Right after I read it – a great renter emailed me to let me know that their A/C went out in 100 degree heat last night, and this was the 2nd issue with it in heat this month. He had such a great attitude about it, and even came up with what was wrong and fixed it himself. (this is an exception…but he is very mechanical.) I delivered a gift card to a favorite local restaurant this afternoon for their troubles, and let them know how much we appreciate them as tenants. Thanks Chris!

  8. Chris,
    What about the market rent increases a year later? Lets see that you can get $200 more per month. It’s good to keep the current tenant, but I think that they may not like the huge increase in rent. What’s your take? If they are great tenants, will you split the rent increase in the middle? such as increase $100 ?

    Thanks, Rachel

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