The Tenants Have Spoken: Here is the Secret to Retaining the Best Renters
Right now, I have more vacancies than I’ve ever had.
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That said, that’s only because I just bought a new triplex and have yet to get them finished and filled. However, it still grinds my gears a bit to have to write out a check to the mortgage company but not get any income from the tenants. I need to fill those vacancies quick. After all, as I mentioned in a previous article “The Two Most Painful Words a Landlord May Ever Hear” – tenant vacancies are the #1 largest expense for a landlord over the long run.
This is why a recent study done by Property Management Reviewer SoftwareAdvice.com stood out to me when I was made aware of it this week. In the survey they conducted, they asked approximately 4,600 renters about the incentives that they would most like to see to encourage them to renew their lease and sign for another year. (Yes, the survey focused on retention, but I think the results would apply the same for attracting new tenants.)
The results were very interesting!
I thought I’d share with you what they found out – so you may be able to offer the best perks to get your tenants to re-up their lease!
Monetary Discount or Special Upgrade?
To encourage tenants to renew their lease, is it better to offer some sort of “monetary” benefit… or something less tangible (like new appliances, upgraded, unit, etc?)
Overwhelmingly, tenants chose a monetary benefit:
What Kind of Monetary Benefit?
So, 52% of tenants would prefer a “monetary benefit” – which is not too surprising. We all like money, right?
But… what exactly are we talking about? Handing a wad of cash over? Discounting rent?
According to the tenant’s surveyed…
What About Unit Improvements?
Okay, maybe you are not able to offer discounts on rent or cash.. but perhaps you could improve the unit some. After all, according to the first graph I showed you, 27% of tenants would prefer a unit upgrade.
The great part about improvements as retention tools is that certain upgrades can actually increase the value of your property – so it’s often a win-win. So, what could you improve, as an incentive, to retain the best tenants?
This is where it gets even more interesting. According to the study, it’s a close three-way tie between “new carpet,” a “washer/dryer upgrade,” and “kitchen appliances.”
Finally, perhaps the most surprising part of this study. What if you wanted to get creative and offer another perk… something “off site?” What would the tenant prefer?
According to the study – survey says… a Gym Membership!
If you want to read the rest of the results of the survey, check it out here. You’ll learn some interesting things – like “when is the best time to offer incentives” or “who does a free TV most appeal to?”
Whether or not you plan to offer incentives to your tenants is up to you – but remember… vacancies are the #1 cash flow killer for real estate investors. By offering some kind of incentive to either sign up or re-sign up a tenant, you can hopefully cut that expense considerably and add more to your bottom line.
I’d love to hear what YOU are doing for incentives to retain great tenants. Leave your comment below!