Better Tenant Retention and Lower Churn
As the pandemic slowly disappears, moratoriums end, and employment resumes, landlords and apartment managers are seeing higher vacancy rates.
Vacancy is impossible to avoid given renters tend to be a transient population. Add on on economic cycles, rising rent prices, and normal life changes, and turnover adds up. It reduces tenant long term value considerably.
Rather than succumbing to the financial loss and random loss of tenants, you can develop a program to retain them.
Vacancies and Long Term Value
While it may be good that a percentage of your tenants will move on to other accommodations, and that some turnover keeps your apartment buildings fresh, you’re faced with filling those vacant apartment units. Advertising programs have good reach now and vacancy rates are so you’ll likely find new tenants and some will be excellent tenants.
But is tenant turnover going to cost you? The high costs of turnover are well documented so professional landlords will want to do the things this fall and winter to hang onto their tenants. From communications to incentives to new services to great maintenance programs, there’s plenty of ways to keep tenants leased.
In 83% of cases where renters leave, it’s caused by a triggering event. It’s important to be up-to-date on your tenants’ perceptions and concerns. Know where their priorities lie and respond to them with top-notch customer service, since your financial situation depends on their satisfaction. — Turnkey Invest Properties.
It is about a great tenant experience, and a whole lot more.
Remember the days of 98% occupancy and zero missed rents? Today, landlords have to earn those numbers. Fortunately, with some tenant management techniques and a helpful property management technology, you have powerful tools for keeping todays renters content and under lease.
It’s October and rent payment moratoriums are ending October. Your new tenant prospects will be hesitant about recommitting to current rent prices, or higher rent prices, and signing long term leases. More tenants are reportedly seeking shorter-term leases and lower rent prices. They may be expecting apartment rents to drop.
The point is that tenants expect more, are reevaluating their work and personal lives, and some just want change even if it’s frivolous. All that doubt needs to be dealt with. You must communicate that they are already in their happy place, and it’s better to stay.
And you might be wondering why tenants quit their leases? Research seems to point to staff performance
Vacancies are Some of the Worst Losses in Property Management
One vacancy typically costs 1 to 2 months rent equivalent. It’s one of the costs that pains you and your property manager most, so it’s worth it to build a plan and strategy and spend some money on the effort. Here’s 5 good reasons:
- lost rent
- added advertising costs and time spent
- brokerage/leasing agent fees
- concessions to new renters
- protect your cash flow
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Please review our property management posts on tenant lease renewals, tenant management tips, tenant communications, keeping tenants happy, and how to reduce tenant turnover. These could be helpful as you devise on how to keep your current tenants leased.
Discomfort is the Real Cause of Vacancies
Comfort of the tenant is key. Tenants move not always because of financial pressure, but from a mounting feeling of frustration, pessimism, worry, hopelessness, disappointment, etc.
They’re also uncomfortable with the rent to income ratio. They’re weighed down by the lack of affordable housing, or any rental housing at all, and that there’s not much coming in 2022/2023.
Some tenants will be changing jobs and moving to new cities. That’s why having a good tenant acquisition process in place is vital. And it’s a system that attracts good tenants who stay leased.
By simply changing how you and your staff listen to and interact with your tenants, coupled with minor property improvements, you can greatly reduce the likelihood that they’ll leave. — Turnkey Invest Properties.
You could keep them leased by helping to manage these feelings of powerlessness rather than passively watch them get fed up and leave. A move might actually not be in their own best interest and could leave them much worse off.
Note: Using your property management software, you can maintain more active and supportive communications with them. Tenants believe the picture of value and comfort you share with them.
And by giving them an opportunity to express their feelings and circumstances, you might be forewarned of those who may give notice. This is where your property management solution can be very helpful.
In General, What Can We Do to Retain Tenants?
Here’s 7 quick ideas on how to keep them leased, as their lease term expires this year.
- remind tenants of how convenient, rare and safe your rentals are
- improve tenant communications to build a stronger connection
- be respectful when speaking to them about late rent and the need to stay current
- reducing rent a little
- ensure they’re aware of all grants/loans available to them (personal or business)
- add a few perks for resigning the lease
It’s great to rev up your imagination about how to keep tenants feeling content and comfortable. It’s going to give you the energy and optimism to create this plan and carry it out.
A tenant retention plan is helpful in structuring the assets you’ll use. A tenant retention strategy helps bring it together in a way that will impact your audience. You must begin your strategy development by taking your tenant’s point of view and considering the full value of what you offer them.
10 Things You Can do To Keep Tenants Leased
- respond quickly to maintenance and repair requests and follow up on tickets for total satisfaction
- ask tenants how they’re doing and if all is well in their unit, with their neighbors or the building and discover what is causing them discomfort
- review the things that make tenants happy and implement at least one of them
- put a focus on grounds or building security, and communicate the extra vigilance for crime to tenants
- add an amenity whether digital amenity or an in home feature
- take a visit to your building/multi-family residential building and make casual conversation to get up to date on what’s happening there
- remind all tenants (broadcast email or message on property management software) to be considerate to neighbors, watch out for safety of children and elderly, and keep social distance to avoid health issues
- conduct a survey and ask what improvements tenants would like
- be polite, courteous and professional — put yourself in a positive, caring frame of mind before you communicate anything to tenants, because the tone of your voice and conversation is what they hear
- offer gifts for on time payments during the pandemic (e.g. $20 food gift card)
If you have emotional intelligence as some call it, you’re apt to see what the real issues are with your tenants. That’s a big advantage to help reduce churn and the tension that causes tenants to end their leases.
Collect insights and feedback through your new channels, i.e., your property management software, and go with your hunches about where you might lose tenants.
This tenant retention effort is one of the processes that can really elevate your rental property management business. You’re managing people, and people like to be happy.
Find more property management insights on the ManageCasa Blog. Stay up on current news, technology, rental housing trends, management tactics and more. 2022 will be a year of opportunity for your company.
ManageCasa property management software is built in the USA for landlords in New York, Chicago, Boston, Philadelphia, Charlotte, Cleveland, Dallas, Houston, Phoenix, Las Vegas, Seattle, Los Angeles, Miami, Tampa, Orlando, St Louis, Indianapolis, Denver, and cities across the US, Canada, Australia, UK and Germany.
Further reading: How to a Attract Good Tenant | Source of Good Tenants | Why do Tenants Leave? | How to Choose Better Tenants | How to Write Better Rental Ads | Screening Tenants Better using Social Media | Better Tenant Onboarding | Rental Listings | What Tenants Want | How to Retain Good Tenants | Reduce Tenant Churn | How to Get them to Renew their Leases | Screen Tenants | How to be a Better Tenant | Best Landlord Software | California Housing Market Forecast | 7 Features of Good Software