Tenant retention is perhaps the most important aspect of your property management. It doesn’t matter whether you own 10 or 1,000 units; the cost for acquisition and vacancy is significant for any property. That’s why tenant retention should be a key component in your overall property management plan. Plus, when you can retain renters, not only does it save you money, but it also helps grow your reputation as a landlord and brings in additional income when tenants renew their leases. All successful property managers have one thing in common — they make tenant retention one of their top priorities. Let’s take a look at why that is so.
What is Tenant Retention and Why is it Important?
Tenant retention refers to the rate at which tenants stay with your property management company after renting from you. The cost of acquiring a new tenant can be up to three times higher than retaining an existing one, so this is something that should be done with care and consideration by landlords across all real estate markets and property types.
If you have many tenants who have been living in your community for years, it’s likely because they like what they see when they look out from their windows each day. On average, a landlord should be able to retain 60% of their tenants across a timespan of an entire year. If you are witnessing a high rate of tenants leaving or evicting too many for some reason, this may unveil underlying issues. A high tenant turnover rate may be caused by an insufficient tenant screening process, lack of amenities, and overall tenant dissatisfaction.
Tenant retention is important because it saves money, whether you are an independent landlord or are utilizing property management services from a third party. In the long run, tenants who renew their leases are more likely to stay with you longer and pay higher rent. That’s because they’re using your building as their home base—and have grown accustomed to its amenities and services.
Tenant retention also helps grow your reputation as a landlord. When tenants renew their leases with you, this puts you on par with other landlords in town who also offer high-quality apartments at fair prices; it shows that you’re doing something right. And when those same tenants decide not to renew their lease after all (which they will), then all those positive reviews can help get other potential renters interested in moving into one of your properties down the road.
How to Improve Your Tenant Retention Rate
If you think you or your property management company are doing a good job, you’re probably right. However, there’s always room for improvement. Here are a few ways that you can work towards increasing your tenant retention rate for the year.
Keep Your Property Up To Date
The most important thing you can do to improve your tenant retention rate is keep your property in good condition. This means a few things:
- Keeping common areas clean, including the hallways and elevators.
- Keeping the landscaping looking nice and free of debris or overgrown bushes.
- Making sure that all appliances are working well and don’t need repairs often (this will also save you money in the long run).
If you maintain these areas of your building, it will give tenants peace of mind knowing they live in a well-maintained building that’s taken care of by its management.
Work With Property Managers
If you’re a landlord, you have to have a solid relationship with your property manager. Property managers can help with finding new tenants and making sure existing ones are happy. They can also assist with maintenance issues when they arise, eviction proceedings if necessary and rent collection. Plus, they’ll work closely on lease renewal so that both parties are clear about expectations going forward.
Create a Good Relationship with Your Tenants
It’s important to build a good relationship with your tenants. If you have great communication with them, it will be easier for you to work through any issues that may arise and keep them from moving out. If you treat your tenants well and are fair, they’ll be more likely to stay for the long term. This can help improve your tenant retention rate and even increase their rent payments.
You can create a friendly environment by making sure the property is well-maintained, having an open-door policy where tenants feel comfortable approaching you with concerns or questions, and communicating clearly about any needs or expectations of theirs (for example, when they need something fixed).
Follow Up With Complaints And Concerns Promptly
When a tenant has a concern that you can’t handle as the landlord, don’t just ignore it. Follow up with the tenant and make sure they are happy with your response. It is important to follow up promptly so you can address any issues. If you don’t hear back from the tenant, follow up again via text or email using an auto-responder message so they know that you are still caring about their needs and concerns.
Are you ready to improve your tenant retention rate? We hope this article has helped you understand what it takes to make sure your renters stay with you for the long haul. Remember: It’s not enough just to provide a great place for people to live — we also need to make it easy for them! If you implement any of these strategies into your property management plan, then you’re sure to see results fast (and happy tenants).