There are things you should do to keep good tenants. Chris Clothier wrote a great article entitled How to Keep Tenants Longer…and a Strategy for Finding New Renters. We should all jump onto this discussion because, if you own properties, you know the importance of keeping your good tenants!
But what if you’ve:
- provided a good property
- been available whenever the tenants called
- responded quickly to their needs and requests
- perhaps even, as Chris suggested, lowered rents when needed.
Sometimes, you’ve provided all the above and your tenant is still moving onto another rental. And, of course, there’s the dreaded fear of raising rents. Fact is, we all need to raise rents from time, and most of us fear losing tenants when we do.
Anytime a tenant decides to move on, and especially if you raise the rent then receive a move-out notice, try sending a “sorry to see you go” letter and include the following:
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Let your tenant know how much it will cost them if they decide to move:
First month’s Rent and Security deposit. To begin with, no matter where they go, chances are they’ll be required to pay not only first month’s rent, but a security deposit as well.
Utility Deposits. They may be required to pay utility deposits. Have they checked what those costs will be?
New items. For any new property, there are always needed purchases such as window coverings, shower curtains, even furnishings.
Moving Truck. A typical U-Haul (our local rate) is $19.95 per day for a small truck. There is an additional charge for mileage, blankets, boxes, insurance, and tax.
Time and Effort. Few people ever calculate how long it will take to pack and unpack everything they own, in addition to the carrying, loading, and unloading time and effort. Even if friends and family pitch in, what is everyone’s time worth? Not to mention the effort involved in gathering enough boxes and packing materials for everything they own.
Children. Will they be able to keep their children in the same school district or near their friends? Moving is a very stressful time for everyone involved, including pets.
Show them the numbers:
If the move is in an effort to avoid a rental increase, show them some numbers. For example: a three percent (or $30 per month for $1000 per month property) means they pay an additional $360 per year. The time and cost to move may be far higher.
Explanation for the increase:
They may not be aware so let them know about your ever growing costs to maintain the property. Property taxes and insurance rates increase every year necessitating an increase in rental amounts in order to continue to maintain their home.
It will happen no matter where they go:
Let them know that, no matter where they move, their new landlord’s costs will also continue to increase and so will their rent.
You might offer to help:
For example, you may want to offer longer term leases to keep rental increases to a minimum. Five percent increase per year for a one year lease, three percent per year for a two year lease, two percent per year for a three year lease.
Interestingly, we’ve had people decide not to move after receiving this letter. Sure, not everyone will decide to stay, but you’d be amazed how few people consider all this before moving. I don’t want my tenants to go through the move then decide, “wow, if I’d known how much it was going to cost to move, I would have stayed.”
I want to give them the opportunity to make that informed decision up front.
What can you add?
Photo: Steven Moreno