As a property manager/landlord, you are already aware that good tenants who pay their rent on time, take care of the property, and are well-mannered and polite, are hard to find. Add to this the loss in rental income as the property lies vacant, the time, effort and money that goes into advertising for new tenants, screening potential tenants, turning the property….phew! It makes more sense to put your effort into retaining the good tenants, who are already renting from you, doesn’t it?
Here are a few pointers to help you ensure your best tenants stick around and renew their lease:
1. Look after the property... and your tenants
Your job does not end with handing over the keys to the rental unit. In order to attract and retain good tenants, you have to maintain a clean, well looked after property that demonstrates your intentions as a landlord or a property manager. You have to make your tenants feel happy and proud that they are living there. A swimming pool that is always filthy, overgrown landscape, malfunctioning outdoor lights – all these factors will count against you when your tenant makes the final decision to renew the lease or move out.
On the other hand, a landlord or property manager who ensures the walkways and sidewalks in his property are cleared of snow in a timely manner in winter, responds to requests or complaints promptly and efficiently, maintains a clean and well-maintained property, and shows concern for the comfort and well-being of his tenants wins their support and loyalty.
2. Be responsive and proactive
It is simpler to get your tenant to renew the lease if he likes you and is happy to deal with you. If you never answer your tenant’s calls, do not call back or show up for the important things, don’t be surprised if he decides not to stay for another year.
Respond to your tenant’s requests or complaints promptly and efficiently. If you feel you need more time to resolve the issue effectively, communicate the situation to the tenant. And most importantly, don’t ignore the request - even if you feel that the problem is something beyond your control. Instead, discuss the issue with them and offer support or resources to help them solve it on their own.
You should also be proactive in solving issues that you know are bound to crop up sooner or later. Come up with a preventive maintenance program to keep track of periodic tasks such as testing smoke detectors, tree trimming, changing HVAC filters and so on. One of my previous landlords used to arrange for a home inspection every fall to make sure that the property is well-insulated and equipped for the coming winter. He also used to contact us on the first of every month to ensure that we are happy with the home or apartment and do not have any concerns. Remember, happy tenants make for a happy landlord.
3. Observe fair housing practices
Follow fair housing rules that help your tenants create a comfortable home for themselves. Offer reasonable rental prices that are comparable to other properties in the neighborhood. It doesn’t take a genius to understand that your tenants are not going to stay with you if you charge high rents that are not inline with the neighborhood or current market conditions.
4. Don’t be a stranger
Don’t be the stranger who turns up only to collect the rent. Send out a greeting card or gift basket to your tenants on their birthdays. Wish them on major festivals and thank them for being a good tenant or paying the rent on time. It won’t cost you much but will bring you a lot of trust and goodwill and help build a relationship.
At the same time, remember your boundaries as a landlord. Don’t show up every other week without prior notice. It is a huge invasion of privacy and can quickly scare away even the best of tenants!
5. Set up a rewards system
Several innovative property management companies have recently come out with resident rewards systems to reward tenants for good behavior, and hopefully, reduce tenant layover. For example, a tenant gets 100 points if he pays the rent on time. He gets another 500 points if he refers a friend who also becomes a tenant. He can then redeem these points for free gifts, household items, restaurant coupons, movie tickets or property upgrades. Obviously, such programs are beneficial for the landlord only if he has a sizeable number of tenants.
6. Form a big, happy family!
Involve your tenants in the community and help them out down roots by organizing events, talks, games or seminars where they can interact with each other. Set up a weekly book club or sports league. Create a garden area where residents can hang around out. Throw seasonal parties. Send out weekly or monthly community newsletters detailing local programs.
7. Train your staff to be tenant-friendly
Remember, you may or may not be able to personally address every tenant concern or complaint that comes your way. Most often than not, your tenants are going to interact with your employees or the leasing office staff. Hire people who understand your policies and treat your tenants with respect.
8. Offer renewal incentives
If you’ve got some great tenants coming up for a lease renewal shortly, contact them before the end date and find out what their plans are. Offer them a renewal incentive if they are still deciding – it may just swing the vote in your favor.
Though you can always ask them directly what it would take to renew the lease, you can also go with the standard and tested renewal incentives such as cash bonuses, electronic gifts, free covered parking, new kitchen appliances or rent discounts. You can also allow them to choose from a list of pre-approved home modifications, such as new flooring, window treatments or different wall colors, to make them feel more at home.
As with any other relationship, the tenant – landlord/property manager relationship requires a continuous investment of time and effort. If your tenant is still set on moving out, don’t hesitate to ask him what went wrong. If you are lucky, it may be something that you can fix, or at least, correct the next time around.
Kurt Jacobson is a snowboarding enthusiast with a background in real estate. Having moved 11 times in the past nine years, he thrives on helping others learn from his experiences. When he’s not out shredding the mountain, he writes about all things rental related for the website RentFinder.co.