According to experts from Multifamily Executive, one of the challenges landlords will continue to face in 2019 is finding and retaining quality tenants. Tenant turnover is one of the biggest cash flow killers a landlord can encounter. When a tenant moves out of your rental property, not only do you miss out on the monthly rental income, but the out-of-pocket costs can also quickly add up—especially when you factor in cleaning, repairs, marketing, and the additional steps it will take to get your property rented again.
Although tenant turnover is unavoidable in the property management industry, there are a few things landlords can do to reduce the number of vacancies they experience. You probably can’t prevent your tenants from moving out of town for a new job or for personal reasons like being closer to family. However, preventing local moves is something you can influence.
Here are four ideas to help landlords attract long-term tenants and minimize tenant turnover.
How to Attract & Retain Long-Term Tenants
1. Start with finding (and then keeping) reliable tenants.
The first step to avoiding tenant turnover is finding tenants who you want to stick around for the long run. Tenants who cause extensive damage, disrupt other tenants on the property, or fail to report important maintenance issues will end up costing you more money if they continually renew their leases. The best way to find and keep quality tenants is by properly screening potential tenants and requiring a detailed rental application for your property.
Be sure to check rental applicants’ credit reports, criminal background, and past rental or eviction history to gather the most accurate information and make an informed decision about what kind of renter each applicant will be. It’s best practice to avoid any red flags and always follow all Federal Fair Housing laws.
2. Build positive landlord-tenant relationships.
Having a positive relationship with a long-term tenant will not only encourage them to stick around but could also lead to word-of-mouth referrals to other dependable tenants. The better history you have with your tenants throughout their lease term, the more likely they will be to choose to renew when their lease is up.
Try to present yourself as an approachable, attentive, and reasonable person and not just a figure simply there to collect the rent check. To the best of your ability, keep the lines of communication open and honest and always respond to any requests or concerns in a timely manner.
There is a fine line to be considered here. You can be friendly, but keep it landlord-tenant relationships professional. This is your business. Be careful not to allow tenants to take advantage of your friendliness.
3. Price your monthly rent in line with the market.
Increasing the monthly rent at your rental properties is something every landlord will inevitably experience. Like every industry, the rental market responds to the economy and provides opportunities for property owners to ask more or less for rental prices depending on their region. You may also need to increase rental prices to pay for property maintenance or improvements, accommodate tax increases, or to simply increase profits.
The key to raising rent prices when the time comes is to do so in a manner that will limit backlash and avoid turnover. If you do find yourself needing to increase prices at your rental properties, be sure to follow all state regulations regarding timing and providing official notice to your tenants, too.
Your rental prices should be on par with comparable rental properties in your neighborhood. In a competitive rental market, tenants will have the opportunity to choose from several different properties, so setting the rate appropriately will help keep your property occupied.
4. Keep your property up-to-date (or even upgraded).
Be sure to keep up on maintenance at your rental properties, even if your tenants have been around for a while. Take maintenance requests seriously and respond to them quickly to prevent costly repairs down the road, or frustrated tenants will start to look elsewhere.
Schedule routine inspections to make sure you catch issues your tenants might not be aware of, and check in with your tenants regularly to make sure everything is in working order.
Simple upgrades to your property can help persuade tenants debating on whether or not to renew their lease. Consider adding property features like an upgraded kitchen, fresh paint, in-unit laundry, or new carpet to make sure your tenants don’t outgrow their space.
The Bottom Line
Tenant turnover is a routine part of the landlord experience, but with the right knowledge and some planning ahead you can do your best to limit turnover and increase tenant retention.
Do you have any tenant retention methods that I left off this list?
Add them in the comment section below!