Top Tips For Retaining Your Best Tenants
08/09/2021
While you wouldn’t think that rental property management has much in common with other businesses, they are alike in one very important respect: acquiring a new client—or tenant, in your case—doesn’t come cheap. In fact, the National Apartment Association says that tenant turnover can cost between $1,000 and $5,000 per unit per month. If you’re wondering whether there’s a better way, the answer is yes: retain the tenants you have. Let’s look at where the lost revenue comes from, and how to stop the bleeding when it comes to Rockford apartments for rent.
Costs of Tenant Turnover
A number of factors lead to lost revenue when a tenant vacates a unit.
- Property preparation; from repairing damage to cleaning and repainting, each turnover requires repairs and rental property maintenance before a new tenant can move in
- Lost rent; each day the apartment isn’t occupied represents revenue gone up in smoke
- Ongoing expenses; from a mortgage and insurance to property taxes, expenses don’t stop just because your income has dropped off
- Legal fees; while not necessarily common, an eviction went south or a tenant who’s behind in their rent when they leave can lead to sky-high legal fees
- Tenant acquisition; even with a good tenant who takes care of their unit and provides a fair amount of lead time before moving out, you’ll still need to advertise the vacancy, run background checks, and take care of other administrative errata
Limiting Tenant Turnover to Save Money
If you’re mentally running the numbers, or even doing a bit of back-of-the-envelope math, you can easily see how quickly and how much these costs add up. You can also start to see how retention makes intuitive—and financial—sense over trying to find new tenants on an ongoing basis. So how can you do that?
Keep Lines of Communication Open
One of the main reasons that tenants vacate, or fail to pay rent, is that they feel their needs are being ignored. Make sure that your tenants can always get in touch for rental repair requests both major (lost heat, plumbing, and electrical problems) and minor (like noise complaints).
Maintain Your Property
Taking care of elements like landscaping, outdoor lighting, and exterior paint and trim goes a long way toward creating a sense of home for your tenants. Well-maintained common areas incentivize them to take better care of their own spaces, too.
Allow for Some Flexibility
If your tenant is lined up before you’ve begun repairs and renovations, ask them about paint colors and give them input on other items that are being replaced. If they’ve been living in your building for a while, ask them about repainting or other fixes they may need. Steps like these create a sense of investment in their home or apartment.
Create a Sense of Community
Your possibilities here are practically endless. If you own a multi-unit dwelling, take—or make—time for tenants to get to know each other, and their surroundings. Even something as simple as a newsletter, or a welcome packet that helps someone new to the area settle in, can make a significant impression.
Incentivize Referrals
If you have a tenant who’s trustworthy, what better way to entice them to stay than by luring in friends and family who’ll encourage them to put down roots? Think of incentives you can offer for the referral of family and friends who are reliable.
Know The Area, Then Set Your Rent
Set an appropriate rent for the area, since a rental that’s priced out of proportion to its location and amenities will, by definition, have a higher-than-average turnover. Keeping rents slightly lower, or limiting rent increases, is a great way to ensure your best tenants stay put.
Pay Attention to Lease Terms
As odd as it may seem, a small but simple switch to your lease or rental agreement can save you thousands. Many leases are written such that they run out at the end of the month. Changing this to mid-month gives you a built-in period of downtime between tenants during which cleanup and renovations can take place.
Rental Property Management in Rockford, IL
Knowledge is key to effective tenant retention. For this reason, many property owners turn to Superior Realtors and Rental Properties for rental property management, and why tenants turn to us when they’re looking for Rockford apartments for rent. We simplify the process for tenants, and for property owners, our processes can be as collaborative or as hands-off as you’d like. For answers to any questions, you may have, reach out to us today.