Improving Tenant Retention
Propertyware just posted a piece on how to improve tenant retention. I summarize the two key takeaways here and add to their list with some of my own thoughts. First, it is important to understand the value that tenant retention has on your business. Many property managers see tenant turnover as "part of the job," but effectively reducing turnover improves your operating margin and can bring much bigger returns to your business. If your fee per month is greater than any turnover fees you charge, there is even more incentive to reduce turnover. In fact, the idea of a turnover fee is against a property owner's best interest as you should see your job as creating a tenant experience that keeps tenant's renting. So here are 3 things that will have the biggest impact on retention - my input comes first.
Create an Amazing Maintenance Experience
Maintenance is the #1 reason that tenants turnover. Can you believe that? 40% of tenants report ending a lease because work order requests were not followed up on. Right underneath maintenance, the secondary reasons are price increases, job changes, and life events. I'd say those secondary reasons may not be worth addressing anyway. Keeping your rentals at market rate is important to keep your business margins high and, of course, you can't change life events of your tenants anyway.
How do you create an amazing maintenance experience? Mainly, follow up on their work orders and be available for their calls. The biggest reasons a tenant will report a poor maintenance experience are as follows:
- No followup after work order is reported.
- Nobody to speak to for work order updates.
- Work orders take too long to schedule.
- Slow followup during urgent and emergency job situations.
For more insights on how to resolve these maintenance issues cost effectively (without hiring more employees), book a free meeting with one of our maintenance consultants here.
This is one of Propertyware's suggestions. One of the best renewal incentives is to gift the tenant a rental upgrade because it makes the tenant happy AND increases the value of the rental property. Some of things upgrades could include flooring improvements, lawn care, fresh painting, and new appliances.
Ongoing incentives can be a proactive and equally influential tool. Partner with a variety of nearby businesses to offer regular and significant discounts.
Remember, incentives provide good reasons for happy tenants to keep renting. An incentive won't keep unhappy tenants renting. Get the fundamentals right first.
Create a Community
Helping renters feel at home begins and ends with engagement. Communicate information efficiently and through a tenant's preferred channels. When a tenant initiates a dialogue, respond in a timely manner to help them feel heard. Quick and meaningful responses are an easy way to build trust.
Creating a communal feeling with tenants goes a long way to build their happiness and make them feel a part of something. While this is harder to do in a single family portfolio, creating friendships between property managers, maintenance crew, and tenants will go along way. Again, get the fundamentals right first, otherwise community building will seem like an inauthentic attempt to keep tenants around.
Always put yourself in your tenant's shoes. Ultimately, you are serving them just like you are serving your owners.