Vacancies are an expense no landlord can afford. The longer a unit sits empty, the more money you lose. In order to reduce vacancies, your best bet is to lower tenant turnover.
Avoiding vacancy isn’t the only benefit of minimizing turnover, though. Replacing tenants right after one leaves can be a costly expense. To do so, you must clean the unit, sometimes make costly repairs to make it presentable again, advertise the vacancy, screen prospective tenants, and more.
Long story short, keeping good, long-term tenants saves you time and money.
There are infinite reasons why a tenant might leave, but a good place to start is screening. You can usually predict when and why a tenant will leave based on the information you screen for. Younger renters, for example, are likely to move on more quickly because their personal and professional lives aren’t yet established. These kinds of considerations can be addressed by preliminary screening.
Tenants might leave due to other circumstances, as well. Sometimes they leave in favor of a safer neighborhood, lower cost of living, better job market, etc. These location-based factors should be considered when you’re investing in new properties.
Regardless of a tenant’s reason for leaving, it’s evident that lowering turnover is crucial for the health of your rental business. Unfortunately, figuring out how to do it can feel like a black box. Below, we go over 8 ways to help you reduce turnover and increase monthly revenue. You’ll be left feeling better equipped to combat vacancies in the future.
1. Screen Tenants Thoroughly
The first place to start when it comes to reducing turnover is tenant screening. You won’t have good tenants to keep if you don’t have any good ones to begin with. In order to thoroughly screen tenants, you should complete credit, background, eviction history, and criminal history checks. It’s possible, of course, that a bad seed might slip through the screening cracks, but these basic checks will ensure that you’re only taking on tenants that meet your standards.
2. Respond Promptly to Maintenance Requests
When tenants reach out with maintenance requests, respond as quickly as possible. There may be some delay in getting the issue fixed, but getting the ball rolling on the repair shows tenants that you care about their experience in your unit, which will encourage them to renew their lease.
What’s more, promptly tending to the issue minimizes the potential damage to your property. The longer a leak goes unfixed, for example, the more water damage you’ll have to correct in the future.
3. Maintain Good Property Condition
No one wants to live in a building that’s falling apart. The last thing you want is to lose a quality tenant over a minor aesthetic issue. The cost of replacing the tenant will likely outweigh the routine upkeep in the long run.
Here’s a list of tasks you can stay on top of in order to maintain the condition of your property:
- Minimal landscaping (mowing the grass, weeding, planting flowers or bushes)
- Routinely applying fresh paint
- Promptly responding to maintenance requests
- Updating out-of-date appliances
- Replacing flooring when needed
4. Avoid Large Rent Increases
A significant spike in rent can easily convince a tenant to leave, even if they weren’t feeling strongly about it before. If you need to up your rent price to keep up with your local market, do it slowly and fairly.
Sometimes a larger rent increase is warranted, but only when you’re making improvements that justify the spike. This could include installing brand new appliances, big remodeling projects, and more.
5. Offer Incentives for Longer Leases
When you feel confident that a tenant is a keeper, always push for a longer lease. You’ll likely be met with a little resistance, but getting a quality tenant to sign a 2-year lease is a sure fire way to lower tenant turnover.
To persuade your tenant to sign the longer lease, offer small but effective incentives. These can include slightly lower rent, free or reduced utility costs, rent-free pets, and more.
6. Uphold Strong Tenant-Landlord Relationships
Since there’s typically frequent communication between tenants and landlords, always try to be cordial when interacting with your renters. No one likes working with unfriendly people, so don’t be that person.
Little things can go a long way in maintaining your tenant-landlord relationship. Be kind and helpful when tenants reach out with inquiries. Respond quickly when they need assistance. Remember important dates such as birthdays, anniversaries, and holidays. Putting in that extra effort will foster a better relationship, encouraging tenants to renew when the time comes.
7. Offer Better Rent Collection Options
As time progresses, tenants want more efficient ways of paying than simply with cash and checks. Young renters in particular are interested in digital payment methods. Modernize your collection process with online rent collection and/or property management software.
Moving rent collection online may seem like hassle that’s not worth the trouble, but landlord-specific platforms make it easy for you and your tenants. The ability to automate payments, send out reminders, and enforce late fees is reason enough to make the switch — and your tenants are sure to thank you for it.
8. Provide Incentives for Lease Renewals
When a quality tenant’s lease is about to end, but they haven’t mentioned anything about renewing, provide them with incentives to do so. Incentives don’t have to be anything big, and you shouldn’t offer them to mediocre tenants, but they’re a great way to encourage tenants to stay when they’re on the fence about renewing.
Incentives can include deals related to your property like slightly lower rent, free or reduced utilities, and rent-free pets. They can also be outside offers like gas cards, discounts at local businesses, and personalized gift baskets.
We’ve gone over just a few of the many ways that you can lower tenant turnover. Once you start thinking about it, you realize that it isn’t as difficult as it sounds. What it really comes down to is putting in that little additional effort, going that extra mile. Showing tenants that you care about their experience in your rental property is often enough to encourage the good ones to stay.