Does it feel like you’re playing musical chairs with your tenants? You aren’t alone. A serious concern of most landlords is finding and retaining quality tenants. A landlord’s cash flow is seriously affected by constant tenant turnover. Rental income loss and many out-of-pocket expenses such as cleaning, repairs, marketing and other steps taken to rerent the property can really cut into profits.
Tenant turnover cannot be avoided when tenants move out of town, closer to family, for personal reasons, or even for a new job. However, you can influence and minimize tenant turnover and attract long-term occupancy by following a few strategies.
Conduct pre-screenings for reliable tenants
Initial screening of tenants will allow a landlord to weed out renters who may be destructive to the property and disruptive to other tenants. Use a detailed rental application and screening for all potential tenants to find reliable renters.
This screening can be done by checking an applicant’s credit report, running a background check and obtaining a rental and eviction history. The results will immediately give clues about the type of renter who is applying. Be sure to follow the Federal Fair Housing laws to avoid any red flags.
Monthly rental should be in line with the industry
To be competitive, set the monthly rental cost in line with the current market in your area. Tenants will compare multiple properties before relocating. A landlord with competitive pricing will be able to keep his properties occupied as his tenants will be satisfied with the rental price they are paying.
If you need to raise the rent, be sure to comply with state rules regarding the timing of the increase and give official notice to your tenant per the lease agreement.
Maintain a positive relationship
Positive relationships between landlords and tenants will encourage the tenant to maintain a long-term residence or to provide referrals to others upon moveout.
Respect your tenant’s rights to the property and show consideration when conducting rent evaluations, inspections, repairs to the property, and when addressing the tenants’ concerns and requests. Provide necessary maintenance promptly.
Keep the relationship professional but not personal at all times so that your friendliness won’t be taken advantage of.
Stay updated on property maintenance
Renters are attracted to well-maintained properties and that often leads to a decrease in tenant turnover. Property maintenance should include scheduled inspections, repairs when needed, quality paint and carpeting as well as fully-functioning appliances.
Property maintenance should be done before a tenant moves to prevent the disruption of the use of the property. Simple upgrades to the property such as fresh paint and an updated kitchen will encourage tenants to renew their lease because they will see the continued efforts of their landlord.
Provide incentives for lease renewal
Encouraging excellent tenants to renew their lease can be achieved by offering incentives such as a special discount for one month or a referral program where they will be given rental discounts for referring good tenants to other properties you manage.
While it might cost you upfront, you’ll save money in the long run. You won’t need to re-market for new tenants and incur the costs of screening tenants or cleaning and rekeying your property. Tenants who are provided with such incentives will feel respected and will value their home.
While some turnover is unavoidable, finding good renters and keeping them happy is the key to decreasing tenant turnover. After all, nobody likes moving.